Future business prospects on edge: SANEM

Business gathered pace in the last quarter of 2021, but it apprehends a bleak future ahead due to the spread of Omicron, fuel price hike and corruption.

Besides, the micro and small enterprises are feeling the pinch because of scanty government support, according to a survey carried out by SANEM (South Asian Network on Economic Modelling).

The findings of the survey were unveiled in a report titled “New wave of Covid-19: State of business confidence in Bangladesh” at a webinar on Monday.

SANEM Executive Director Selim Raihan presented the report of the 7th round of survey that focused on each quarter throughout 2020.

A total of 502 firms participated in the survey where 252 and 250 were from manufacturing and service sectors. The sample was collected from eight divisions and 38 districts.

Business Status Index: The Present Business Status Index (PBSI) shows that it gradually improved from April-June quarter last year when it bagged 42.57 points, but increased to 52.31 points for July-September quarter and stood at 54.15 points in the last quarter (October-December) of 2021. But the improvement rate was not high.

The index reflected the business firms’ sales; increase in export and profit in October-December in 2021 compared to that in the previous quarter.

But some sectors like Textile, Restaurant, Transport, ICT, Financial, Real Estate and other service sectors’ business status plummeted in October-December period last year over the previous quarter.

Business Confidence Index: Despite a good status on October-December period last year, the firms’ business confidence declined for January-March of 2022. Business Confidence Index (BCI) declined to 54.99 points for current quarter, which was 60.67 points in the last quarter of 2021.

According to the business firms, sales, export, profitability, investment, employment, wage and business costs will rise in near future.

In this context, Selim Raihan mentioned that businessmen are worried about the high infection rate of Omicron, lack of management with regard to the pandemic situation on the part of the government and uncertainty at home and abroad.

In addition, rising fuel price and lack of desired government support are shooting up the business costs, and so the businessmen feel that their businesses will go bad in near future, observed Selim.

Economic Recovery: With the Business Confidence Index falling, more firms than ever before think that Bangladesh will see a week economic recovery.

In the 7th round of survey for January-March, 39 per cent firms think that