Business confidence in Pakistan ticked higher in May, driven by a more optimistic outlook in the industrial sector, while sentiment in the services sector softened slightly, a joint survey by the State Bank of Pakistan (SBP) and the Institute of Business Administration (IBA) revealed.
The overall Business Confidence Index (BCI) rose 0.3 points to 57.2 in May, the survey said. Confidence in the industrial sector improved notably, with its sub-index increasing by 2.8 points to 57.9. In contrast, the services sector index dipped 0.5 points to 57.
The BCI combines two sub-indices: current confidence, which looks at the past six months, and expected confidence, which reflects outlook for the next six months.
The Current Business Confidence Index fell 0.7 points to 55.3, while the Expected Business Confidence Index rose 1.3 points to 59.1 suggesting businesses remain cautiously optimistic about the near term.
The Purchasing Managers Index which tracks changes in orders and output, climbed 2.5 points to 56, pointing to modest gains in activity.
Inflation expectations among businesses declined by 0.8 points to 63.4, although services firms reported higher anticipated price pressures than their industrial counterparts.
Employment sentiment showed mixed signals. The Expected Employment Index rose 0.5 points to 55.8, while the current employment situation weakened. Industry confidence around hiring rose 2.8 points to 55.9 but fell 2.2 points to 52.2 in the services sector.
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Average current capacity utilisation in manufacturing rose 0.9 percentage points to 65.7 per cent, indicating slightly improved production levels.
The SBP-IBA Business Confidence Survey is a regular measure of corporate sentiment and is used by policymakers to assess economic trends and future expectations.
