SBP Business Confidence Survey Shows A Mixed Picture

The State Bank of Pakistan (SBP) released its Business Confidence Survey report for April 2021. This is the 22nd survey in the series and includes 467 firms.

Overall Business Confidence

The Overall Business Confidence remained in the positive zone for the 5th consecutive wave. However, the value of the index was lower in the latest BCS wave compared with the previous one, the SBP said.

The index decreased from 60 in February 2021 to 58 in April 2021. This fall in the index during the current wave of BCS is driven by both the industry and services sectors, although their sentiments continued to be higher than the benchmark of 50.

Overall Business Confidence measures the Current Business Confidence Index (CBCI) and the Expected Business Confidence Index (EBCI) jointly. The opinion of participants of BCS on account of current economic and business conditions continued to move into the positive zone but relatively in lower intensity from the previous wave.

As far the expectations regarding economic and business conditions in the next six months are concerned, a slight decrease was witnessed after remaining constant during the last four waves.

Current Business Confidence

The Current Business Confidence Index (CBCI) decreased by 3 points to 55 in April 2021 over February 2021 wave. This change in CBCI was driven by both industry and services sector. The industry sector CBCI decreased by 2 points from 59 in February 2021 to 57 in the current wave.

Similarly, the services sector confidence decreased by 2 points from 57 in February 2021 to 55.

Looking at the distribution of responses, there is a significant decrease in positive views and an increase in negative views, while the share of neutral views has increased in the current wave.

The overall percentage share of ‘positive’ and ‘very positive’ views has decreased from 47 in February 2021 to 40 in April 2021. On the other hand, the percentage share of negative and very negative opinions has increased by 3 percent to 21 in April 2021 over the last wave.

The main driving factors for this decrease in the CBCI are the increase in the negative views of survey respondents about general economic conditions in the country and their production/sales over the last six months.

Expected Business Confidence

The Expected Business Confidence Index (EBCI) decreased slightly in April 2021 after remaining the same for the last four waves at 62.

The disaggregation of EBCI results reveals a decrease in positive views and an increase in negative views during April 2021 wave, while the neutral views have increased in the current wave.

The overall percentage share of positive views (positive plus very positive) has decreased by 5 percentage points to 48 in April 2021. Contrarily, the percentage share of negative views has increased from 8 percent to 11 percent during the last two waves.

Purchasing Managers Index

An upward trend was observed in Purchasing Managers Index (PMI) since June 2020. However, after reaching its highest level in the last wave, it decreased slightly in the latest wave. PMI decreased from 58 in February 2021 to 57 in April 2021. This decrease in PMI is driven by the decrease in the firm’s business activities and the firm’s total ordered books in the recent wave.


The current employment diffusion index slightly improved within the green zone with the level of 51.3 in the current wave. However, the change in current employment by both sectors remained contrary – the industry sector decreased from 53 in February to 52 in the current wave.

While the services sector moved upward to 51 in April 2021 from 50 in February 2021.

Similarly, the expected employment index also slightly improved to 56.1 in April 2021. The disaggregation of employment index results reveals an increase in the industry sector by one point to 57, while the services sector increased from 55 to 56 in the current wave.


Overall inflation expectation increased by 3 points from 65 in February 2021 to 68 in April 2021. This is the highest level since October 2019.

Sector-wise inflation expectations reveal that respondents from both sectors are expecting inflation to increase with higher intensity in the latest wave over the previous wave.

Inflation expectation of industry sector increased by 5 points to 70 in a current wave while service sector respondents see a slight surge of one point to 64 in April 2021 wave.

Courtesy: Pro Pakistani

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