LAHORE - Overseas Investors Chamber of Commerce and Industry (OICCI) has shared results of its latest Business Confidence Index (BCI) Survey – Wave 12, which reached a record level of 36 percent positive, showing a further 14 percent improvement over Wave 11 results (22%) announced in November 2015.

At 36 percent positive, the overall BCI score reflects a remarkable level of bullishness by the overall business community throughout the country – with the manufacturing sector leading the upswing with 30 percent positive sentiment, recording a 17 percent growth, depicting a move back to an expansionary cycle. The retail and service sectors followed with net increases of 13 and 8 percent respectively.

The business confidence of the leading foreign investors, represented by the OICCI members, who were part of the survey, kept pace with the overall increase, by recording a similar increase of 14 percent to go up to 55 percent from 41 percent in the Wave 11 results.

“The record high level of business confidence indicates that the business community is generally satisfied with the sustainability and the firm resolve of the authorities in effectively tackling law and order situation, mainly in Karachi and northern areas, and visible improvement in energy management, especially for industrial sector throughout the country, which were amongst the key drivers for improved business confidence,” said OICCI President Shahab Rizvi. “The reduced cost of doing business due to reduction in petroleum product prices, low single digit inflation and borrowing rates and expectations of better economic condition following CPEC and other ongoing energy projects based on coal and LNG may have also contributed in boosting the confidence of the business community to a record level.”

As in the previous surveys, improvement in overall BCI was not one directional as several respondents expressed concern on the very same factors viewed favorably by the majority. Moreover, a significant portion of the respondents has highlighted poor infrastructure/facilities and over regulation as well as lack of proper policy implementation as detrimental for existing investors as well as new investors in Pakistan. Businesses are seriously concerned with operational issues like delays in tax refunds, lack of reforms in rules and regulations in line with changing environment, cumbersome procedures and lack of accountability and slow decision making process.

The survey indicates that real estate and financial services sectors have flourished the most, followed by petroleum, and FMCG sector. Tobacco, textile, motor vehicles and non-metallic sectors remained subdued.

Encouraged by the very positive business confidence, OICCI President, Shahab Rizvi advised the government authorities to leverage the positivity by taking bold growth oriented policy initiatives, along with visible measures to improve governance through predictable, transparent and consistent implementation of policies. Provincial leadership is also advised, OICCI president added, to effectively play the critical role they have in improving the business environment, as reflected in the very poor rating of Pakistan in the annual World Bank’s Ease of Doing Business surveys”.

Metropolitan cities across the country recorded higher business confidence with Sukkur, Quetta, Rawalpindi/Islamabad, Lahore, and Karachi, in order of priority, indicating a more positive outlook. Faisalabad and Sialkot, the cities which respectively host the textile and non-metallic sectors, remained negative along with Peshawar and Multan.