KARACHI – Almost 70 percent of respondents comprising manufacturers, services and retail sectors do not support the reformed GST. In the business category, 80 percent of retailers and 66 percent of manufacturers and service providers have rejected the proposed reformed GST.
It was indicated in a survey of the third quarter Business Confidence Survey (BCS) conducted by Overseas Investors Chamber of Commerce and Industry (OICCI). The BCS is conducted on a quarterly basis to gauge the sentiments of the business community towards the global and local business situation and the business environment in the city, in their particular industry, and also the environment in their own organisation.
The survey further highlights sentiments of the business community in the past six months and their forecast for the next six months. The survey conducted in October and November 2010, indicated that business confidence, which had taken a sharp dip in the second quarter of 2010, has now begun to recover.
According to the major findings of the OICCI’s BCS of Quarter 3: the overall business confidence in second and third quarters has remained almost the same, the textile, chemical and finance sectors have performed comparatively better over the year, the food and petroleum industries are planning to increase their investments over the next six months, employment seems to have decreased in almost all sectors over the past nine months with the exception of the food industry and the financial sector.
The worst hit segments were real estate and textiles showing lower profit margins as well as decreasing employment levels. The business confidence index (BCI), which was +6 percent in the first quarter, had dropped to 27 percent in the second quarter. However, in the third quarter survey, it stabilised with -26 percent Business Confidence Index (BCI).
While business sentiment was relatively higher at the beginning of 2010 when organisations were laying out plans for the upcoming months, it fell short of expectations in the second quarter. Additionally, the second quarter survey was conducted immediately after the budget, which may have contributed in lowering confidence levels. Likewise, the devastating floods may have dampened spirits in the third quarter.
The respondents of the survey felt that the global and local business situation is expected to remain unchanged in next six months (which includes 1st quarter of 2011). Manufactures were less optimistic about improvement in business in comparison to the services and the retail sectors. The major reason for not anticipating further improvements in business was the ongoing rise in inflation and the deteriorating security situation.
An overall business confidence comparison of third quarter vs second quarter indicates the Business Confidence of OICCI members is up by eight percent, while non-OICCI members have shown a negative confidence in the business by registering a negative four percent change. The slight improvement in the BCI is due to better confidence level amongst OICCI members.
