Pakistan’s Business Confidence Index improves as services sector leads growth

ISLAMABAD: In August 2024, the Business Confidence Index (BCI) went up by 2.4 points, reaching 51, according to the 51st Business Confidence Survey (BCS), which was conducted by the State Bank of Pakistan (SBP) along with the Institute of Business Administration (IBA).

This rise was witnessed due to improvements in the Services sector, though the Industry sector also saw some growth.

The BCI for the Services sector grew by 3.1 points, reaching 51.7, while the Industry sector’s BCI increased by 0.2 points to 48.7. The survey report explained that the overall BCI is made up of two parts: the “Current Business Confidence Index (CBCI)” and the “Expected Business Confidence Index (EBCI).”

Business owners felt more confident about both the current and future business conditions in August 2024. The CBCI, which measures the country’s economic situation over the past six months, went up by 2.9 points to 49.4 compared to the last survey.

According to Mettis Global, this increase was seen in both the Industry and Services sectors. Specifically, the CBCI for the Industry sector went up by 0.6 points to 47.1, and the Services sector increased by 3.7 points to 50.2. The survey showed that more people had positive or neutral views, while negative views dropped.

Looking ahead, the EBCI, which predicts economic and business conditions for the next six months, also improved in August, going up by 2 points to 52.6. The Services sector led this growth, with its EBCI rising by 2.6 points to 53.3, although the Industry sector saw a small drop of 0.1 points to 50.4. Similar to the CBCI, the positive and neutral views for the future increased, while negative views dropped a lot.

Additionally, the Current Employment Index, which measures employment levels, increased by 2 points to 51.4. Both the Industry and Services sectors contributed to this rise, with the Industry sector increasing by 1.4 points and the Services sector by 2.2 points.

However, the Expected Employment Index, which looks at future employment levels, slightly dropped by 0.1 points to 53.6. The Industry sector’s Expected Employment Index improved by 1.3 points to 51.9, but the Services sector saw a small decline of 0.7 points to 54.1.

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