June 10, 2024 (MLN): The overall Business Confidence Index improved by to 54.6 in May 2024, the latest results of the 48th 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 increase is driven by both the Industry and the Services sector.

The Industry sector BCI increased by 2.2 points to 52.1, while the Services sector increased by 0.7 points to 55.4.

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, increased by 1.1 points to 51.2 in May 2024 over the previous wave.

This change is driven by both the Industry and the Services sector.

The CBCI of the Industry sector increased by 2.8 points to 48.3 while that of the Services sector CBCI increased by 0.5 points to 52.1.

The disaggregation of responses reveals that the positive and neutral views increased in the current wave while the negative views decreased.

Expected Business Confidence

As far as the expectations regarding economic and business conditions in the next six months are concerned, an increase was observed in the Expected Business Confidence Index (EBCI) in March, up by 1.1 points to 58.

Both the Industry and the Services sector contributed to this change.

The EBCI of the Industry sector increased by 1.6 points to 55.9 while that of the Services sector increased by 0.9 points to 58.7.

The disaggregation of responses shows an increase in the positive and the neutral views, while the negative views decreased in the current wave.

Purchasing Managers Index

The Purchasing Managers Index (PMI) decreased by 0.6 points to 49.3 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 decrease in the indices of four out of its five components.

A decrease of 1.5 points was observed in the total orders booked followed by the firms’ business activities (by 1.0 points), average supplier delivery times (by 0.6 points), and total number of employees (by 0.3 points).

On the other hand, quantity of raw material purchases slightly improved by 0.1 points in May 2024.

Inflation Expectations

Regarding inflation, the survey revealed that Inflation Expectations (IE) decreased significantly by 10.1 points to 56.0 in May 2024.

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

The Inflation Expectations of the Industry sector decreased by 10.2 points and that of the Services sector by 9.8 points

Employment

The survey also highlighted a rise in the Current Employment Index by 1.1 points to 51.2 in the current survey wave.

This increase was contributed by the Services sector which increased by 1.6 points to 52.4.

On the other hand, the same for the Industry sector decreased slightly by 0.3 points in May 2024 from the previous wave.

The overall Expected Employment Index decreased by 0.8 points to 55.1 in May 2024.

This change was driven by the Services sector which decreased by 1.0 points. On the other hand, the index for the Industry sector increased slightly by 0.1 points in May 2024

Capacity Utilization

The Average Current Capacity Utilization (ACCU)1 of the Manufacturing sector (within the Industry sector) increased by 4.1% to 67.7% in May 2024.

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Posted on: 2024-06-10T16:25:46+05:00