KARACHI: Pakistan’s business confidence has risen sharply to +22%, an 11-point jump from the previous survey cycle, according to the latest Business Confidence Index (BCI) Wave 28 published by the Overseas Investors Chamber of Commerce and Industry (OICCI).
Covering companies that account for nearly 80% of Pakistan’s GDP, the OICCI BCI is one of the country’s most closely watched measures of business sentiment, particularly among foreign investors and multinational firms. The latest findings of the survey suggest firms may be becoming more willing to expand operations, hire staff and undertake new investments, even as structural challenges persist. The survey also shows the services sector reporting its strongest score in eight years, signaling renewed optimism among firms after a prolonged period of economic strain.
The outsized jump in services and retail sentiment — alongside the recovery of non-metro cities from negative territory — indicates broad-based improvement across sectors and geographies.
“The results of Wave 28 point to a cautiously improving business climate. The performance of the services sector and the strong forward-looking expectations show that business stakeholders are reassessing Pakistan’s economic direction with greater optimism,” OICCI President Yousaf Hussain was quoted as saying in a press release.
“While challenges persist, the willingness of businesses to invest and expand is a promising sign for the months ahead.”
The survey shows the services sector posting a 24-percentage-point uplift, its highest score since 2017, followed by a 15-point improvement in retail, while manufacturing recorded a more modest 1-point gain. Sentiment in Pakistan’s largest cities rose from +14% to +23%, while non-metro locations rebounded from –3% to +19%, indicating recovery beyond the main commercial hubs.
A notable trend highlighted in Wave 28 is the rapid adoption of generative artificial intelligence. According to OICCI, 43% of member companies are already using generative AI, while 81% expect AI to take over key business functions in the near future, a significant shift for a market where digital transformation has historically been uneven.
Forward-looking indicators also strengthened. The New Orders (Expansion) Index rose from 26 percent to 41 percent, led by a jump in services and retail. Hiring expectations improved, with the New Jobs Index rising from 13 percent to 16%, driven by a 21-point surge in services-sector hiring plans. The New Investment Index, previously in negative territory, improved from –4% to +12%, indicating businesses are once again planning capital expenditure.
Commenting on the underlying trends, the survey notes broad-based recovery but also uneven performance across sectors. OICCI Secretary General and Chief Executive M. Abdul Aleem said Wave 28 showed confidence strengthening in services, retail and non-metro cities, but added that the modest gain in manufacturing pointed to the need for focused efforts to support industrial competitiveness and reduce cost pressures.
Despite the improvement in sentiment, respondents identified persistent challenges that continue to weigh on business operations. These include taxation, inflation, rupee devaluation, corruption, and inconsistent government policies, all of which remain critical risks to sustaining the recovery reflected in the survey.
