KARACHI: American data companies, Dun and Bradstreet have found that business sentiment in Pakistan has turned pessimistic from optimism thanks to a two-month lockout imposed after an outbreak of coronavirus infection.
Dun and Bradstreet’s Business Optimism Index (BOI) for the first quarter of 2020 on Monday showed that enforcement of the locking in the third week of March intensified the decline in business sentiment and accelerated the shift from optimism to pessimism.
The company found that business was optimistic and hoped that the pandemic would not affect Pakistan very acutely, prior to the lockdown.
Only a marginal decline of 2.4 percent was witnessed in the BOI pre-locking Q1 2020 when compared with the BOI 2019 Q4. However, the BOI 2020 QI, after enforcement of the lockdown, fell from a 141.1 point high – the index level before the lockdown – to 85.6 points, below the benchmark neutral value of 100 points and showed a significant change in business sentiment from optimism to pessimism.
The BOI survey was conducted during Q1 2020 with companies spread throughout Pakistan. These companies include a mix of small, medium and large companies with representatives from the manufacturing, trade and services sectors in proportion to the contribution of their respective value added to GDP.
Dun and Bradstreet launched their world-famous BOI for Pakistan in Q4 2019 and aimed to measure the pulse of the business community and provide a view of business sentiment in the country.
D&B helps Pakistani businesses identify and evaluate alternative business partners, vendors and customers so that they can minimize the impact of the current situation by building new relationships where their existing suppliers and customers can no longer do business with them. It deals with more Pakistani businesses and helps them explore new avenues for business amidst the lockdown and impact
The BOI for Q1 2020 represents mixed sentiment collected before and after the lockout announcement. Because most of the responses were captured by locked restrictions, the BOI Q1 2020 issue mainly – at the aggregate level – reflects a pre-Covid-19 sentiment analysis.
This survey focuses on five main parameters for a business: sales revenue, selling price, sales volume, number of employees, and profits.
At an overall level, business is optimistic for all parameters for Q2 2020. However, post-locking, there is a significant change in business sentiment. Before locking up, 68 percent of respondents anticipated an increase in sales revenue and 62 percent of respondents anticipated an increase in profits. However, after locking up, only 19 percent of respondents anticipated an increase in sales revenue and net profit. In addition, before closing, only three percent of respondents anticipated a decline in the number of employees. However, post-lockdown, the number increased sharply to 16 percent.