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Overall business confidence in January-March this year faces a decline in comparison to the October-December 2021 quarter, reflecting their growing concern about the advent of Omicron, according to the latest study.
Most of the sectors have expressed lesser confidence for the upcoming quarter, it also states.
However, the survey results showed that the Present Business Status Index or PBSI (year) is approaching the mark of 60 in the October-December 2021 quarter from 56.79 in the earlier quarter, indicating a continuation of improvement.
Considerable improvement has been observed in the profitability and sales or export order sub-indicators, the survey result showed.
Findings from the seventh round of the ‘Business Confidence Index’ survey, conducted by the South Asian Network on Economic Modeling (SANEM), were presented on Monday at a webinar titled ‘New Wave of COVID-19: State of Business Confidence in Bangladesh’.
The findings were presented by Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and Executive Director of SANEM.
Professor Raihan emphasised faster disbursement of the stimulus packages, easing access to stimulus packages, and government support focusing on specific requirements of firms.
Addressing the challenges associated with Covid-19, the study recommended developing the sector-specific protocol for managing the situation, accelerating the vaccination programme, and considering pragmatic stringent policies.
The webinar was attended by economists, academicians, researchers, development practitioners, journalists, and students.
SANEM has been conducting this survey since July 2020. Under the latest (seventh) round of the survey, a total of 502 firms were surveyed from January 3 to 24 this year.
The firms represented micro, small, medium and large enterprises from seven sub-sectors of the manufacturing sector including RMG, Textile, Leather and Tannery, Pharmaceutical and Chemicals, Food Processing, Electronics and Light engineering; and eight sub-sectors of the services sector including Retail, Wholesale, Hotels and Restaurants, Financial Sector, ICT, Transport and Real Estate.
The firms were sampled from 38 districts of all 8 divisions of the country. The top management of the firms were surveyed over the telephone for the purpose of the study.
The study also says most of the sectors have expressed lesser confidence for the upcoming quarter, reflecting their growing concern about the advent of Omicron.
Similar to PBSI (year), the PBSI (quarter) points to an improvement in business activities in October-December 2021 quarter in comparison to July-September 2021 quarter, as per the study.
Compared year-on-year, RMG, Textile, Restaurant, Food Processing, and Pharmaceuticals sectors have registered a comparatively faster recovery.
Progress in PBSI became slower during the period of Jul-Sep 2021 to Oct-Dec 2021 compared to the previous period of Apr-Jun 2021 to Jul-Sep 2021 quarters.
There was a significant gap between Business Status and confidence during the period of Jul-Sep 2020 to Jan-Mar 2021.
However, the gap was almost fully mitigated during Apr-Jun 2021 and Jul-Sep 2021 when the status and confidence overlapped. But the gap started to rise again from this quarter (Oct-Dec 2021).
Large firms (57 per cent) and exporter firms (56 per cent) have higher business confidence (BCI) compared to the micro/ small/ medium firms (54-55 per cent) and non-exporter firms (54 per cent) respectively, it stated.
Large firms (63 per cent) and exporter firms (55 per cent) have higher business status (PBSI: quarter) compared to the micro/ small/ medium firms (60-61 per cent) and non-exporter firms (54 per cent) respectively.
Firms inside Dhaka (55 per cent) have higher PBSI (quarter) compared to firms outside Dhaka (54 per cent) while no significant difference has been found between them in case of the Business Confidence Index (BCI).
Some 17 per cent of respondents in the seventh round of the survey (January 2022) observed that Bangladesh is on a path of strong recovery, while it was 21 per cent in the earlier round.
Similarly, their views on moderate recovery have fallen to 44 per cent in this round from 52 per cent in the previous round.
Despite fuel price hike and the threat of a new wave of COVID-19, the business recovery rate increased to 60.6 per cent in December 2021 which is higher than that of September 2021 (56.8 per cent) and even higher than the earlier record of 57.4 per cent registered in March 2021.