Pakistan’s business confidence rises in May 2025

June 16, 2025 (MLN): The overall Business Confidence Index (BCI) increased by 0.3 points, reaching 57.2 in May 2025, according to the latest results of the Business Confidence Survey (BCS), conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA).

This uptick was driven primarily by the Industry sector, while the Services sector showed a slight dip. Specifically, the BCI for the Industry sector increased by 2.8 points to 57.9, whereas confidence in the Services sector decreased by 0.5 points to 57.

According to the survey report, the headline index “Overall Business Confidence” is comprised of two sub-indices: the Current Business Confidence Index (CBCI) and the Expected Business Confidence Index (EBCI).

The overall BCI is a weighted average of the Industry and Services sectors with 0.25 and 0.75 weights, respectively.

Current Business Confidence

The CBCI, which reflects business sentiment over the past six months, fell by 0.7 points to 55.3 in May 2025. This improvement stemmed from better sentiment in both sectors.

Expected Business Confidence

The EBCI, representing expectations for the next six months, rose by 1.3 points to 59.1, indicating that businesses remained cautiously optimistic about the near future.

Purchasing Managers Index

The Purchasing Managers Index (PMI) also improved, rising by 2.5 points to 56, suggesting a modest increase in production and new orders.

Inflation Expectations

The Inflation Expectations (IE) of businesses decreased by 0.8 points to 63.4, with the Services sector experiencing a sharper rise compared to Industry.

Employment

The Expected Employment Index increased by 0.5 points to 55.8, while the Current Employment Index decreased. For the Industry sector, it rose 2.8 points to 55.9, and for the Services sector, it fell 2.2 points to 52.2

Capacity Utilization

The Average Current Capacity Utilization (ACCU) in the Manufacturing sector increased by 0.9% to 65.7%, signaling improved production activity.