March 08, 2022 (MLN): Pursuing its good momentum since August 2020, the overall Business Confidence Index (BCI) managed to remain in the green zone in February 2022, findings of the State Bank of Pakistan’s February 2022 BCI survey showed on Tuesday.
BCI remained at 53 points in the month of February 2022 as was in the previous wave of December 2021.
The stability in BCI is derived from both sectors; industry and services.
The views of BCS respondents on account of current economic & business conditions improved in February 2022; however, the index for expected economic and business conditions recorded a decline in the latest wave.
The latest results of the 27th wave of Business Confidence Survey (BCS), conducted by the State Bank of Pakistan (SBP) with a sample of 481 firms revealed that the Current Business Confidence Index (CBCI) increased by 2 points to 51 in February 2022 from 49 in December 2021.
The improvement in CBCI during February 2022 can be attributed to the rise in CBCI in the services sector. The industry sector CBCI remained almost the same at 51 in December 2021 while the services sector confidence increased by 3 points to 51 in February 2022 from 48 in the previous wave.
The major contribution to this increase in CBCI is an increase in the positive views of survey respondents about general economic conditions in the country over the past six months.
The Expected Business Confidence Index (EBCI) remained within the positive zone since August 2020; however, decreased in February 2022. EBCI decreased by 3 points from 58 in December 2021 to 55 in February 2022, largely contributed by the services sector.
As far as Purchasing Managers Index (PMI) is concerned, it decreased within the positive zone in the current wave. PMI decreased from 57 in December 2021 to 55 in February 2022. PMI’s disaggregation shows a decrease in the indices of its four out of five components. Indices for Firms’ production, the total number of employees, the quantity of raw material purchases, and total orders booked have decreased in the current wave, while supplier delivery times improved in the same period.
The survey also found that the overall inflation expectations of businesses index increased by one point to 71 in February 2022. This increase in inflation expectation contributed by the services sector which increased by 3 points to 72 in February 2022 wave, whereas the industry sector’s inflation index remained unchanged at 70 in the same period.
Regarding employment, the overall current employment diffusion index decreased by one point to 52 in February 2022, mainly contributed by a decline in the industry sector. Industry sector employment deteriorated while services sector employment remained the same in the current wave.
Meanwhile, the expected employment diffusion index decreased by 1 point to 56 in February 2022. This decrease was shared by both sectors; industry and services.
As per the survey, Average Current Capacity Utilization (ACCU) measures the percentage of total capacity being utilized by the industry sector, witnessed a marginal increase of 1 percent to 70 in the latest wave of BCS from 69 percent in December 2021.
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