Tag: capacity utilization

  • Pakistan’s Business Confidence Index increases in May 2024

    Pakistan’s Business Confidence Index increases in May 2024

    The overall Business Confidence Index (BCI) in Pakistan rose to 54.6 in May 2024, according to the 48th wave of the Business Confidence Survey conducted by the State Bank of Pakistan (SBP) and the Institute of Business Administration (IBA).

    This increase was driven by improvements in both the Industry and Services sectors, with the Industry BCI rising by 2.2 points to 52.1 and the Services BCI by 0.7 points to 55.4.

    The headline index, “Overall Business Confidence,” consists of the Current Business Confidence Index (CBCI) and the Expected Business Confidence Index (EBCI). The CBCI, reflecting economic conditions over the past six months, increased by 1.1 points to 51.2 in May 2024.

    Specifically, the Industry CBCI climbed by 2.8 points to 48.3, while the Services CBCI edged up by 0.5 points to 52.1, indicating more positive and neutral views and fewer negative perceptions.

    Looking ahead, the EBCI saw a 1.1-point increase to 58, driven by rises in both sectors. The Industry EBCI grew by 1.6 points to 55.9, and the Services EBCI by 0.9 points to 58.7, with a corresponding shift towards more positive and neutral expectations.

    However, the Purchasing Managers Index (PMI) fell by 0.6 points to 49.3, continuing to stay below the positive zone last seen in June 2022. Four of the five PMI components decreased: total orders by 1.5 points, business activities by 1.0 point, supplier delivery times by 0.6 points, and employment by 0.3 points. Only the quantity of raw material purchases slightly improved by 0.1 points.

    On inflation, expectations significantly dropped by 10.1 points to 56.0, with the Industry and Services sectors both showing decreases of 10.2 and 9.8 points, respectively.

    Employment trends were mixed. The Current Employment Index rose by 1.1 points to 51.2, primarily due to a 1.6-point increase in the Services sector, despite a slight 0.3-point decrease in the Industry sector.

    Conversely, the Expected Employment Index fell by 0.8 points to 55.1, driven by a 1.0-point decline in the Services sector, while the Industry sector showed a marginal increase of 0.1 points.

    Additionally, the Average Current Capacity Utilization (ACCU) in the Manufacturing sector within the Industry sector increased by 4.1 per cent to 67.7 per cent in May 2024.

  • Pakistan’s textile industry struggles as exports fall by 28% in February

    Pakistan’s textile industry struggles as exports fall by 28% in February

    On Monday, the All Pakistan Textile Mills Association (APTMA) released provisional data indicating that Pakistan’s textile sector exports declined significantly by 28 per cent, totaling $1.2 billion in February 2023, compared to $1.67 billion in the same month the previous year.

    Additionally, APTMA reported that textile exports for the first eight months of FY23 decreased by 11 per cent to $11.24 billion, down from $12.60 billion in 8MFY22. These declines are alarming for Pakistan, whose economy is already struggling with depleting foreign exchange reserves.

    The country’s central bank has only $3.81 billion in reserves, which is barely enough to cover a month of imports.

    Industrialists in Pakistan have expressed concern about the ongoing slump in the textile sector. Data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday revealed that cotton arrival in Pakistan also decreased by 34.5 per cent year-on-year.

    Last month, APTMA urged the federal government to implement a uniform gas price of $7 per MMBtu for the export industry throughout the country to ensure a level playing field.

    APTMA also warned that the government’s decision to suspend the regionally competitive energy tariff (RCET) of electricity for Export Oriented Units (EOUs) would harm the textile industry, particularly in Punjab.

    In December, APTMA wrote a letter to Prime Minister Shehbaz Sharif, warning that the country’s textile exports could fall below $1 billion a month from 2023 onwards, highlighting a range of issues affecting the sector, which is currently operating at less than 50 per cent capacity utilization.