Business confidence likely to rise: survey

LAHORE: The Business Confidence Survey 2015 conducted jointly by the Lahore School of Economics and the Lahore Chamber of Commerce and Industry reveals that 200 firms from across the sectors expect better growth in 2015 after it has risen in 2014.
Dr Azam Amjad Chaudhry Dean of Lahore School of Economics and Ejaz A Mumtaz, president of the LCCI, formally launched the report at a function in the chamber premises.
The survey revealed that though 70 percent of the manufacturing firms were able to increase their investment in 2014, it was not financed by banks, but the resources were generated from increase in firms’ revenues.
The firms complained that slow and ineffective mechanism to enforce contracts were significantly more important for firms in services sector compared to firms in retail and manufacturing sectors.
The revenue from total sales increased in 56 percent of all 200 firms, remained same in 20 percent and declined in 24 percent. In case of manufacturing concerns revenues increased in 63 percent, remained same in 17 percent and declined in 20 percent. Among the service providing companies revenues registered increase in 50 percent firms, remained same in 20 percent and declined in 30 percent. Retail sector performed the worst as only 42 of the firms surveyed experienced increase in revenues, there was decline in revenue in 42 firms and revenues in 17 percent firms remained the same. In the domestic sales 50 percent of all firms saw increase in revenues out of which there was 58 percent increase in manufacturing, 47 percent in services, 32 percent in retail. In exports only 37 percent of the firms reported increase in revenues; out of which 44 percent manufacturing firma managed to increase exports, services export increase was reported by 31 percent firms while only 28 percent retail export firms reported increase in export sales. The expectations of firms for revenues are higher for 2015 as 63 percent of the 200 firms survey expect increase in revenues. For domestic sales 56 percent firma are optimistic while 53 firms see exports rising.
58 percent companies made investments in 2014 led by manufacturing sector where 70 percent of the companies increased investment. However bank borrowing increased in only 23 percent of the companies surveyed, declined in 27 percent and remained same in 50 percent. Bank borrowing was lowest in services sector where only 11 percent availed borrowing facility. Companies expect the bank borrowing to remain at more or less the same level in 2015.
On the employment side 43 percent firms reported increase in number of employees, 18 percent reported decline while number of employees remained same in 50 percent. Forty nine percent of the companies in manufacturing and services sectors reported increase in number of employees. Around 50 percent firms expect to increase number of workers in 2015.
58 percent of the firms survey said access to finance has a major impact on their business. The financial access was deemed important by 58 percent firms in manufacturing sector, 55 percent in services and 60 percent in retail. Unavailability of skill workforce was considered impediment to business by 52 percent of all firms surveyed. In manufacturing 58 percent firms considered unavailability of skills as an important hurdle.