ISLAMABAD, March 29: About 80 per cent of the firms reported that general price level increased during last six months of the year and 75 per cent expected it to continue rising in the next six months, reveals a survey.

Conducted by Pakistan Institute of Development Economics (PIDE) — a research institute of the federal government - the Business Barometer said that only 12 per cent respondents said the prices remained stable and seven per cent said the prices declined.

“The net balance confirms a large majority of firms are holding on to higher inflationary expectations,” said the survey a biannual publication based on more than 700 listed firms.

The survey launched by PIDE director Dr Nadeem-ul-Haq said the 48 per cent of the respondents experienced an increase in the prices of their products in the last six months and 35 per cent said it remained the same while for 16 per cent the price fell from the first half of the year.

The firms are feeling the price pressure on the input side which is forcing them to raise their final goods prices. None of the respondents reported a decrease in the prices of their inputs. “Large number of them, 92 per cent, indicated that their input prices increased in the last six months and 78 per cent expected a rise in the prices of their inputs”.

The survey included banking sector, textile, sugar and allied industries, oil and gas, cement, engineering, automobile, fertilisers, pharmaceuticals, chemicals, rice, banaspati and allied industries, food and personal care, glass and ceramics. The questionnaires were sent to all the companies registered with the Securities and Exchange Commission of Pakistan but only 10 per cent or about 700 responded.

Most of the firms, about 87pc, reported rise in wages in the second half of 2006 over the first half and 67pc expected the wage inflation would continue to rise.

The survey reveals that overall growth of the economy during last six months remained stable and expected the stability in economic growth in the next six months. “Although most of the firms expect the same level of growth but the net balance remains negative. This implies that the growth target of 7.0 per cent for the year 2007 could not be achieved,” the survey said.

About 43 per cent firms reported increase in their production and 24pc said their production reduced in the last six months. About 65pc firms expected their production to rise in the next six months and 32 per cent said they expected it to remain the same.

On the sales front, 45 per cent companies reported increase in their sales, 19 per cent reported reduction and 33 per cent said they did not experience any change in their sales in the last six months compared with preceding six months. About 68 per cent expected their sales to go up and seven per cent said they expected fall in their activity in the domestic market.

Interestingly, 40 per cent respondents said their sales activity in the international market declined and 36 per cent showed improvement and 23pc reported no change. This perhaps also fingers towards slowing down of exports.

About 53 per cent firms were optimistic about increase in sales abroad and only 20 per cent said they expected decline in sales. The net balance has changed to a positive 33 per cent indicating that the order books for exports have turned around.