Pakistan’s business sentiment has strengthened notably, with the OICCI Business Confidence Index (BCI) – Wave 28 showing an 11 percentage-point rise, pushing the overall confidence level to +22 percent. The latest survey, covering businesses that represent nearly 80 percent of the country’s GDP, also highlights a significant shift towards innovation, with 43 percent of OICCI members already adopting generative AI technologies and 81 percent expecting AI to take over key business functions in the near future.
In a development not seen in nearly a decade, the services sector has posted its highest sectoral score since 2017, registering a record uplift of 24 percent. The retail sector followed with a 15 percent improvement, while manufacturing recorded a modest 1 percent increase. Metro cities rose from 14 percent to 23 percent, and non-metro locations, from -3 percent to 19 percent, indicating broad-based geographical recovery.
OICCI members, in particular, registered a notable improvement in sentiment, with their confidence level increasing from plus 17 percent in the previous wave to plus 27 percent, a climb attributed to an optimistic outlook regarding investment and operational expansion in the coming period.
Forward-looking indicators also show strong momentum, with businesses reporting clearer growth plans for the next six months. The New Orders (Expansion) Index rose sharply to 41 percent from 26 percent, driven by the services sector’s jump from 23 percent to 47 percent and the retail sector’s rise from 14 percent to 41 percent, while manufacturing posted a modest improvement from 36 percent to 37 percent. Hiring expectations strengthened as well, with the New Jobs Index increasing to 16 percent from 13 percent, underpinned by a 21-point surge in services sector hiring plans, from 8 percent to 29 percent.
Investment sentiment recorded a notable turnaround: the New Investment Index improved from minus 4 percent to plus 12 percent, led by strong rebounds in both the services and manufacturing sectors.
OICCI President Yousaf Hussain said the survey findings reflect a constructive shift in business sentiment after a turbulent economic period.
“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. While challenges persist, the willingness of businesses to invest and expand is a promising sign for the months ahead,” he stated.
Speaking on the underlying trends highlighted in Wave 28, OICCI Secretary General and Chief Executive M. Abdul Aleem noted: “Wave 28 points to a broad-based recovery, with confidence strengthening across services, retail, and even in non-metro cities that previously recorded negative sentiment. However, the manufacturing sector’s marginal rise highlights the need for focused efforts to support industrial competitiveness and cost stability. Sustaining this upward trajectory will require continued attention to the structural issues affecting manufacturing so that confidence can strengthen across all segments of the economy.”
Despite the upbeat indicators, OICCI Business Confidence Wave 28 Survey respondents identified persistent challenges including taxation, inflation, rupee devaluation, corruption, and inconsistent government policies among the key concerns. These remain the top threats to sustained business growth.
