Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

Business Confidence Index reaches its highest level of 64 points in June’21

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

July 28, 2021 (MLN):  The overall Business Confidence Index improved further by 6 points, reaching its highest level of 64 points in June 2021, from 58 points in April 2021.

This is the sixth consecutive wave of Business Confidence to be in the positive zone, which reveals the persistence of positive opinion of the business community regarding economic and business activities in Pakistan.

The latest results of the 23rd wave of Business Confidence Survey (BCS), conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA), revealed that the sentiments of the business community continued to move into the positive zone for the 6th consecutive wave due to current economic and business conditions. As far as the expectations regarding economic and business conditions in the next six months are concerned, a significant increase was observed in the positive zone during the last six waves. Resultantly, Business Confidence Index (BCI) increased in June 2021, as shown in the figure below.

The survey results reflect that the improvement in the current wave of BCS is supplemented by both the industrial and services sectors.

The Business Confidence Index (BCI) for industry, increased by 5 points from 58 in April 2021 to 63 in June’21, while for the services sector, BCI moved up by 6 points from 58 to 64 points.

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)”.

The CBCI improved by 6 points to 61 in June'21 over April’21 wave. This positive change in CBCI was led by both industry and services sectors. The industry sector CBCI increased by 4
points from 57 in April 2021 to 61 in the current wave. Similarly, the services sector's confidence increased by 6 points from 55 in April 2021 to 61 in June 2021.

Looking at the disaggregation of responses, there is a significant rise in positive views and a fall in negative views. The share of neutral views has decreased in the current wave.

The major factors for this increase in CBCI are; increase in the positive views of survey respondents about general economic conditions in the country, their production/sales, and
increase in employment over the last six months.

Similarly, the Expected Business Confidence Index (EBCI) also increased significantly in June'21 and reached its historically high level (67).

The disaggregation of EBCI results reveals an increase in positive views and a decrease in negative views during June 2021 wave while the neutral views decreased in the current wave.

EBCI remained the same at 62 in December 2020. However, change in future expectations from both sectors remained contrary to each other as the industry sector is expecting an improvement in future economic and business conditions, while the services sector expecting these conditions to deteriorate within the positive zone (compared to the previous wave’s expectations).

As far as Purchasing Managers Index (PMI) is concerned, it remained consistent
during the last two waves of BCS. PMI remained the same at the level of 57 in June 2021. This unchanged PMI constituted by stability in the firm’s business activities, the firm’s total orders booked in the recent wave, and improvement in employment. However, the gain in employment is offset by a decline in the quantity of raw material purchases and supplier delivery times.

The survey also found that the perceptions about employment improved as the Current Employment Diffusion Index inflated by 2 points to 53 in June’21. The improvement in current employment is contributed by both sectors (industry and services). The industry sector increased from 52 in April 2021 to 54 in June’21. Similarly, the services sector improved by 1 point to 52 in June’21 from 51 in April’21.

Likewise, the expected employment diffusion index also improved by 3 points to 59 in June 2021. The improvement in the expected employment index is shared by both sectors (industry and services). Employment in the industry sector increased by 2 points to 59 in the current BCS wave, while the employment in the services sector increased from 56 to 59 in June’21.

Copyright Mettis Link News

 

Posted on: 2021-07-28T14:31:00+05:00

42433