Experiencing sluggish activity: PIDE Business Barometer optimistic about future prospects

Though businesses continue to operate in a challenging environment with stagnant production and sale volumes, they remain somewhat optimistic about their future prospects, says PIDE Business Barometer. Firms that have performed well in terms of production, sales and exports attribute their success to strong demand for their products while firms experiencing sluggish business activity have blamed shortage of utility supplies as a major bottleneck hindering their performance.
Surprisingly, however, energy shortage is not the top most constraint faced by the firms, which may be due to alternative arrangements made by the firms to cope with the energy crisis. Even though firms are optimistic about economic revival majority of firms have no plans to enhance their productive capacity. Most of the businesses have reported increase in the prices during the first half of the year 2012 and expect them to increase in the second half of the year as well. However, they expect the inflation to remain in single digits.
A slight improvement in the permanent as well as the contractual employment shows little improvement in the labour market. The only significant change is observed in the textile sector where some firms laid off contractual employees. The laying off of contractual employees is consistent with the decline in the production and sales.-PR