Business confidence decline signals investment slowdown, warns PFC

LAHORE
The Pakistan Furniture Council (PFC) has expressed concern over the sharp decline in business confidence revealed in the latest Overseas Investors Chambers of Commerce and Industry (OICCI) survey, warning that weakening sentiment could further slow investment, production, and export growth in Pakistan’s industrial sectors.
In a statement issued here on Tuesday, PFC Director Shahbaz Aslam said the findings of the Business Confidence Index (BCI) Wave 29 highlight growing uncertainty in the business environment, driven by inflationary pressures, rising fuel costs, currency volatility, and geopolitical tensions in the Middle East.
He noted that the survey shows a significant drop in overall business confidence to 13 per cent, along with a sharp fall in investment intentions to just 2 per cent, reflecting a near-freeze in new capital deployment across multiple sectors. He said this trend is deeply concerning for manufacturing industries, including furniture, which rely heavily on stable input costs and predictable market conditions.
Shahbaz Aslam said that 70 to 80 per cent of businesses delaying investment decisions is a worrying signal for Pakistan’s economic future. He stressed that the furniture industry, which has strong export potential, is also facing rising production costs, logistics challenges, and reduced domestic demand due to inflation.
He added that external shocks, combined with internal policy uncertainty, are forcing businesses to shift focus from expansion to survival. According to him, without immediate policy stability and cost relief, industrial growth will remain under pressure.
The PFC director urged the government to take urgent steps to restore investor confidence by ensuring consistent economic policies, reducing energy tariffs, and providing targeted support to export-oriented industries. He said that predictable taxation and improved ease of doing business are essential to revive industrial activity.