Pakistan’s Business Optimism Index (BOI) for Q3 2021 is the highest since 2019 and has continued to showcase substantial growth for the preceding three quarters, indicating a favorable outlook for the business community.
According to Dun & Bradstreet’s ‘Business Optimism Index’ report, business sentiment among local firms in Q3 2021 rebounded to pre-COVID-19 levels, mainly on account of a reduction in overall infection cases in the country due to increased vaccination rates.
The BOI registered 154.2 points in Q3, 2021 compared to 152.1 points in Q2, 2021, indicating an increase of 1.4% quarter-on-quarter. The BOI for Q3, 2021 is the highest since Q4, 2019, indicating an improvement of 5.3% in optimism in comparison to the corresponding period last year.
Large companies’ index increased to 162.5 in Q3, 2021 from 153.6 in Q2, 2021. In comparison, SMEs’ index declined to 141.9 in Q3, 2021, from 150.0 in Q2, 2021. This highlights that Large companies are more optimistic about the future compared to SMEs likely due to greater sustaining power during lockdown restrictions.
Exporters’ optimism declined by 1.6% in the current quarter after an increase in the last quarter, in line with the decline in SME optimism as SMEs made up about 70% of exporters in the survey.
The trading sector is most optimistic about the upcoming quarter with a BOI of 160.9, while the Manufacturing Sector is the only sector to decline, with a BOI of 147.0. While there is higher optimism regarding Sales Revenue and Sales Volumes, optimism is relatively muted for Selling Price, indicating a likely price-sensitive and competitive market. On a quarterly basis, the index for the Trading sector exhibits the largest improvement of 13.4 points (9.1%) over the last quarter.