February 10, 2020 (MLN): Dun & Bradstreet has launched its World-Renowned ‘Business Optimism Index’ for Pakistan according to which Businesses in Pakistan are overall optimistic about their outlook for Q1, 2020. The composite Business Optimism Score stands at 144.6 points compared to a benchmark neutral value of 100 points.
As per the report, Large Companies are relatively more optimistic than Small and Medium Enterprises (SMEs), as the composite score for large companies stands at 149.5 points compared to 137.3 points for SMEs. Additionally, companies in the Services Sector are more optimistic than Trading and Manufacturing Sectors.
Dun & Bradstreet’s ‘Business Optimism Index’ was initiated in the early 1900s has now made its way to Pakistan. This report will be published every quarter and aims to measure the pulse of the business community and serve as a tool to assess the business outlook in Pakistan.
The responses for the business situation reflect respondents’ outlook in regards to the current business situation (Q4, 2019) and forecast business situation (Q1, 2020). Based on the results, respondents are more optimistic with respect to forecast business situation vis-a-vis to the current business situation. 66% of the respondents expect business situation to be good in the upcoming quarter compared to 42% of respondents in the current quarter. 9% of the respondents expect their business situation to be poor in the upcoming quarter, compared to 16% in the current quarter which is a positive indicator for businesses
Key business challenges highlight issues perceived by businesses at the end of Q4, 2019 that have impacted near term business growth and development. According to the results, 42% of the respondents consider Government fees/taxes as one of the major challenges followed by competition (34%), and unfavourable business regulations (30%). 40% of respondents also reported other factors to be major challenges amongst which exchange rate fluctuation (7%), political instability (6%) and economic slowdown (3%) were most prominent.
The survey elicits responses from businesses in Pakistan, to understand their current performance and business expectation for five key parameters, i.e. Sales Revenue, Selling Price, Volumes Sold, Number of Employees, and Profits. Businesses are relatively more optimistic for all the parameters, except Selling Prices for the upcoming quarter (Q1, 2020).
As per the report, the exporters are more optimistic than non-exporters as a composite score for exporters stands at 144.8 points compared to 134.3 points for non-exporters. 68% of the exporters expect an increase in their export performance in the coming quarter.
USA, UAE and UK were identified as the top export destination for businesses. Moreover, 29% of the businesses indicated that they are planning to export to new markets in the coming future. Government fees/taxes, competition, and unfavorable business regulations were regarded as the key factors hindering growth for businesses during the quarter.
Mr. Nauman Lakhani, Country Head of Dun & Bradstreet in Pakistan, at the launch of the Index said, “I am excited & proud to launch the first issue of Pakistan Business Optimism Index for Q4, 2019. Business Optimism Index (BOI) is Dun & Bradstreet’s (D&B) proprietary product and has been used globally across USA, Saudi Arabia, UAE (Dubai, Sharjah, Ajman), Qatar, Kuwait, Turkey, India, Singapore, Malaysia, Australia to name a few. Following the rich heritage of the product, D&B is pleased to initiate its BOI coverage in Pakistan starting from Q4, 2019. Over time, we expect the index to emerge as a leading indicator of key turning points in economic activity in Pakistan. We trust that this Report will be a useful tool in business decision making.”
The BOI survey was conducted during Q4, 2019 with companies across Pakistan. The companies included a mix of SMEs and Large Enterprises and has representation from the Manufacturing, Trading, and Services sectors in proportion to their respective value-added contribution to GDP. D&B expects to publish the index quarterly with the next issue planned for Q1, 2020. Complete findings of the report, along with index calculation methodology, can be viewed on D&B’s website: www.dnbpk.com
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