The Business Confidence Survey (BCS) serves as a leading indicator of economic activity, providing timely insights that support short-term economic monitoring and forecasting. It plays a crucial role in monetary policy formulation, given its forward-looking nature and its ability to capture the expectations of key economic agents.

By capturing the sentiments, expectations, and behavioral drivers behind business decisions, the survey complements quantitative data and enhances understanding of broader economic dynamics—making it an essential tool within the policy and research framework.

The State Bank of Pakistan (SBP), in collaboration with the Institute of Business Administration (IBA), conducts BCS every month. The survey covers businesses across various sectors, including manufacturing, services, construction, wholesale/retail trade, and financial services. It collects business perceptions on production, employment, credit demand, inflation, and overall economic outlook.

In January 2023, the survey frequency was increased from bi-monthly to monthly. More recently, the time horizon for the question on qualitative inflation expectations used for construction of diffusion index has been extended from six months to twelve months for one-on-one comparison with the similar index of the SBP Consumer Confidence Survey.