LAHORE: Business owners, largely pessimistic about the future, have started developing a better perception of their businesses.

A latest Gallup survey conducted in the first quarter this year finds that 47 per cent of Pakistan’s businesses, especially those selling garments, commodities, stationery, and gift items, perceive themselves to be in better conditions. This shows a three per cent improvement over the previous quarter. The current business situation score on Gallup Business Confidence Index (GBCI) has improved by seven percentage points to 6pc in 1Q2024 from -1pc in the previous quarter, noted Gallup Pakistan Survey report.

“While economic security has not fully stabilised due to the ongoing political situation, the business situation score has improved regardless,” it said.

It said while the current business score on GBCI continued to recover for the fifth straight quarter, the future business score and direction of the country score see a reversal. About their expectations for future business conditions, the businessmen sounded pessimistic as the net future business confidence score has worsened by 16pc since last quarter and now stands at 4pc, according to the survey report. The business community’s perception about the direction the country is heading in was negative as only 20pc respondents said Pakistan was heading in the right direction. The direction of the country score has fallen to -60pc, down 13 percentage points compared to the previous quarter.

“There is an overall decline in the future business and direction of country scores” between the third quarter of 2023 and first quarter of this year, the report observed.

Like the previous survey, inflation was the most cited problem as more than two out of four businesses would want the new government to control. The proportion of those who want the government to arrest the devaluation of the rupee has also increased.

“Political instability and taxes have taken a backseat in concern relative to the past quarter, while utility bills and business-related legislation have become more of a concern,” the report said. Asked whether business conditions during past three months induced a decrease in the workforce, three out of 10 businesses surveyed said yes. This number shows 6pc decline over the previous quarter.

Given the still backbreaking inflation and a slow economic activity in the country, businesses were asked about their sales this Ramadan and more than half of them said it had worsened. Only 18pc said they are doing better.

Moreover, a majority, 73pc, of the businesses surveyed do not have the hope that Prime Minister Shehbaz Sharif will address business problems. The survey reveals that while majority of businesses, 74pc, did not make such complaints some service providers and manufacturers

said they had to pay bribes in past six months ending March to run their businesses.

About half of the businessmen, 45pc, think of the government as irrelevant for their business, while 23pc look at it as a facilitator and 33pc consider it a hurdle, according to the survey report. Despite government’s claims to have reduced loadshedding, the number of businesses braving power outages has increased by seven per cent to 45pc this quarter compared to the previous one.

“After many quarters more businesses perceive that their current situation is better than before which is a positive news, said Bilal Ijaz Gilani, executive director at Gallup Pakistan. He, however, said pessimism about the country’s economic future as well as the direction of the country has deteriorated.

Majority of businesses surveyed are not very optimistic about the new government, citing the latest survey results.

“Engagement and actively resolving business community issues should be therefore top priority of the federal and provincial governments,” said Mr Gilani.

Published in Dawn, April 6th, 2024