Pakistan’s overall Business Confidence Index (BCI) declined by 0.5 points to 49.1 in September 2026, reflecting a modest deterioration in business sentiment across both the industry and services sectors. The latest findings come from the Business Confidence Survey conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA).
The survey was conducted between September 1 and 11, 2026, and collected responses from 477 businesses. The decline in overall confidence was spread across both major sectors covered by the survey, with the Industry Business Confidence Index falling by 0.3 points to 48.5 and the Services Business Confidence Index declining by 0.6 points to 49.3.
The Current Business Confidence Index, which measures perceptions of general economic and business conditions over the previous six months, also recorded a slight decline. The index eased by 0.2 points to 46.5 in September, indicating that businesses remained cautious about conditions experienced during the recent period.
Expectations for the coming six months weakened more noticeably. The Expected Business Confidence Index dropped by 0.8 points to 51.7 in September from the previous survey wave. Despite the decline, the index remained above the neutral level, suggesting that businesses continued to maintain a positive overall outlook for future economic and business conditions.
In contrast to the decline in business confidence, the Purchasing Managers Index (PMI) showed stronger activity during the month. The PMI increased by 2.7 points to 53.2 in September, remaining above the neutral threshold and indicating an improvement in overall purchasing and business activity.
All reported PMI sub-components recorded increases. Business Activity rose to 52.0, while the Total Employees index increased to 50.1. Order Books climbed to 51.7, Raw Material Purchases edged higher to 57.7 and Speed of Suppliers’ Delivery improved to 54.6. The broad-based improvement across these indicators points to stronger activity despite the weaker overall confidence reading.
Inflation expectations, however, moved higher during the latest survey period. Aggregate business inflation expectations increased to 7.7 in September from 6.9 in the previous survey wave. The share of businesses expecting prices to increase also rose to 69.8% from 68.9%, indicating that a larger proportion of respondents anticipated higher prices in the coming period.
At the sector level, inflation expectations increased in both Industry and Services. Expectations in the Industry sector rose from 67.8% to 69.5%, while the Services sector recorded a smaller increase from 69.9% to 70.1%. The movement suggests that concerns about price pressures remained present across different parts of the economy.
Employment sentiment presented a mixed picture. The Current Employment Index declined to 48.9 in September from 50.1 in August, moving below the neutral mark and indicating weaker perceptions of current employment conditions. However, expectations for future employment improved, with the Expected Employment Index rising to 53.1 from 52.2 in August.
Manufacturing capacity utilisation also recorded a modest decline. Average Current Capacity Utilization in the manufacturing sector eased to 64.8% in September from 65.6% in the previous survey wave. While the decline was limited, it indicates that manufacturers were operating at slightly lower average capacity levels during the latest survey period.
Overall, the September survey presents a mixed picture of Pakistan’s business environment. Business confidence and current employment sentiment weakened, while expectations for future employment and purchasing activity improved. At the same time, higher inflation expectations remain an area of concern for businesses as they assess economic conditions and future operating costs.
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