March 26, 2024 (MLN): The overall Business Confidence Index decreased by 1 point to 51.7 in March, the latest results of the 46th wave of the Business Confidence Survey (BCS), conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA), revealed.

It is pertinent to note that this decrease is derived from both the Industry and the Services sectors.

The Industry sector BCI decreased by 1 point to 50.3 while for the Services sector, it decreased by 1.1 points to 52.1.

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

Current Business Confidence

The Current Business Confidence Index (CBCI), which is based on the general economic conditions in the country over the past six months, decreased by 1.3 points to 47.7 in March 2024 over the previous wave.

Both the industry and services sectors are the contributors to the drop.

Industry sector BCI fell 1.5 points to 46.1 in the current wave, while that for services sector decreased by 1.2 points to 48.2.

The disaggregation of responses shows a decrease in the positive views with neutral views remaining stable and negative views increasing in the current wave.

Expected Business Confidence

As far as the expectations regarding economic and business conditions in the next six months are concerned, a slight decline was observed in the Expected Business Confidence Index (EBCI) in March, down 0.8 points to 55.7.

Both the Industry and Services sectors were the contributors for this change whose EBCI decreased by 0.6 and 0.9 points respectively in current wave.

The disaggregation of responses shows a decrease in the positive views, while the neutral and negative views increased in the current wave.

Purchasing Managers Index

On the other hand, the Purchasing Managers Index (PMI) increased slightly by 0.1 points to 49.7 in the current wave from the previous wave.

It is worth mentioning here that the PMI was last seen in the positive zone in June 2022.

The PMI’s disaggregation shows improvement in indices of three out of its five components in March 2024.

The highest increase of 1.4 points was observed in the firm's business activities followed by total order booked (1.1 points) and average supplier delivery times (0.6 points).

On the other hand, quantity of raw material purchases decreased by 1.7 points and total number of employees decreased by 1.2 points in the current wave.

Inflation Expectations

Regarding inflation, the survey revealed that Inflation Expectations (IE) increased by 4.9 points from the previous wave and reached 69.4 in March 2024.

Both the Industry and the Services sectors contributed to the increase in overall IE.

The Industry sector witnessed an increase of 4.3 points and the Services sector inflation expectations increased by 6.3 points in the current wave.

Employment

The survey also highlighted a rise in the Current Employment Diffusion Index by 2 points to 50.9 in the current survey wave on account of the rise in the Services sectors.

The Current Employment Index for the Services sector increased by 3 points in March 2024 from the previous wave.

Conversely, the Industry sector’s Current Employment Index decreased by 1.2 points to 48.3 in March 2024 over the previous wave.

Capacity Utilization

The Average Current Capacity Utilization (ACCU)1 of the manufacturing sector (within the Industry sector) increased by 2.4% to 67.7% in March 2024 from the previous wave.

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Posted on: 2024-03-26T15:25:26+05:00