KARACHI: Entrepreneurs and businessmen are getting increasingly pessimistic about the future of their businesses, owing to the country’s political and economic situation.
According to a Gallup Pakistan survey conducted in the last quarter of 2022 for the Gallup Business Confidence Index, 65 per cent of business owners believe their businesses are facing bad conditions.
Out of all types of businesses, owners of the businesses dealing in industrial machines are doing the best, with 75 percent of them believing that conditions are good. Owners of cloth and garment shops are experiencing the worst level of confidence, with 81 percent of them saying business conditions are bad.
Findings of the survey show that the Net Future Business Confidence score has worsened by 50 per cent since the beginning of 2022, and is now at -10 percent. Compared to earlier this year, the number of businesses saying the country is headed in the wrong direction has gone up by 32 percent.
Less than 15 percent of the businesses in Punjab, Sindh and Khyber Pakhtunkhwa believe that the country is headed in the right direction. A quarter of the businesses in Balochistan believe the same.
Similar to the findings of the survey conducted in the first quarter of 2022, inflation remains the most-cited problem that businesses would like the government to solve by the end of this year. As many as 72 percent of the businesses surveyed said they have to endure load-shedding each day.
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A considerable increase in the number of businesses experiencing load-shedding was witnessed in the fourth quarter. About 19 per cent of the businesses that reported facing load-shedding within a day experienced it for two hours, the survey showed.
As many as 81 per cent of the businesses said they do not believe the court system is fair, impartial and uncorrupted versus seven per cent in the first quarter of 2022. More businesses in Balochistan disagree with the idea that the justice system is fair, impartial and uncorrupted as compared to other provinces, survey results showed.
One-quarter of the businesses surveyed reported their establishment was visited by tax officials, down 12 percent from the previous survey.
Under the survey, more than 700 business owners and managers across Pakistan were asked how well their businesses were doing. After Covid-19 peaked, businesses started to express greater confidence. But confidence plummeted between the beginning and the end of 2022.
“This sudden change, and a 63 per cent fall in the Current Business Situation score, may be due to the continuous political instability over the year,” it said.
The survey asked business owners which problems were affecting their businesses more. Besides inflation, “customer shortage” was a problem that 8 percent of them faced. High taxes were also perceived as a problem by 4 per cent of the businesses.
“Gallup Business Confidence Report for the fourth quarter of 2022 paints a bleak picture. The index values are the worst since Gallup started the project in 2019, which includes Covid-19 times,” said Bilal Ijaz Gilani, executive director of the Gallup Pakistan and chief architect of the Gallup Pakistan Business Confidence Index.
“The report comes after Pakistan faced the worst floods in decades. The business community awaits strong and decisive steps by the government,” he added.
Copyright Business Recorder, 2022