By Staff Reporter
KARACHI: Business owners in Pakistan are becoming increasingly pessimistic about the prospects and conditions of their businesses, according to the latest Gallup Pakistan Survey released on Friday.
The survey, which is the ninth quarterly Business Confidence Survey conducted by Gallup Pakistan, found that last year’s political instability has combined with various economic crises to exacerbate business insecurity.
The survey, conducted in the first quarter of 2023 with around 520 businesses across Pakistan, found that on all three strands, the value was negative, indicating that more businesses lack confidence in the business situation in Pakistan.
Bilal Ijaz Gilani, executive director of Gallup Pakistan and chief architect of the Gallup Pakistan Business Confidence Index, notes that “businesses in Pakistan are faced with multiple calamities: decades-high inflation killing consumer purchasing power, absolute lack of stability in the political system causing overall despair not just in the business community but also their consumers, and lastly no end in sight with respect to the looming threat of sovereign default. In the past many decades of reading the pulse of the business community in Pakistan, we have not seen such dire times being reported.”
According to the survey, 66 percent of businesses perceive themselves as facing bad or worse conditions, with a 7 percent increase in those reporting very bad business conditions.
While there was a slight fall observed in the Gallup Pakistan Business Situation Net score this quarter, a downward trend has been observed since the end of the previous year.
Around 70 percent of businesses perceive bad conditions in Sindh and KPK, and 64 percent in Punjab.
Most business types reported the business being in a bad state.
In the construction, cosmetics, and industrial machines/equipment sector there was a 50-50 split between good and bad conditions.
The survey found that 7 percent more businesses than in the previous quarter think that their business will be worse off in the future, with 61 percent in Q1 2023 saying that future expectations are negative, while only 38 percent expect things to improve at all.
The Net Future Business Confidence score has worsened by 11 percent since the previous quarter and is now at -22 percent.
The majority (90 percent) of businesses surveyed believe that the country is headed in the wrong direction.
Inflation is the most cited problem in this quarter that businesses (45 percent) would like the government to solve.
Compared to last quarter, 10 percent more want the government to help with currency depreciation but 7 percent fewer believe the government should provide relief on utility prices.
The survey found that more than half (57 percent) of businesses surveyed have not undergone layoffs in the last quarter, but 38 percent do report a decrease in their workforce during this time.
Of the businesses surveyed, 58 percent reported raising average output prices in the last quarter, with 45 percent raising those prices between 20 percent and 50 percent.
The majority (72 percent) of businesses surveyed are concerned by Pakistan’s potential default, with nearly half (49 percent) expressing significantly high concern. 17 percent of survey respondents are not concerned at all.
Regarding load shedding, 44 percent of businesses surveyed said ‘yes’ to daily loadshedding this quarter, which is 28 percent less than the previous quarter.
Of those businesses that said yes to load shedding, nearly three out of four (73 percent) this quarter report facing 4 hours or less of load shedding every day, compared to the previous quarter when a similar proportion of businesses (77 percent) reported getting 5-6 hours or less.
Finally, the survey found that more than three-quarters of the businesses surveyed have not established a digital presence for themselves. 76 percent do not have WhatsApp for business, 86 percent do not have a website, and 85 percent do not have a Facebook account.
Copyright © 2021 Independent Pakistan | All rights reserved
