UPBEAT ON PROSPECTS

Survey shows firms have continued to express intention to expand capacity and keep up hiring

KUALA LUMPUR

COMPANIES operating in Malaysia are optimistic about their business prospects for the next six months, according to a survey by RAM Ratings.

Export-oriented firms are more bullish than their domesticcentric counterparts, as the former stand to gain from strong external demand given the momentum of global trade recovery, which has led to seven months of double-digit export growth since December.

According to the fourth RAM Business Confidence Index survey, this affirmed the higher index values for turnover and profitability expectations, in all the four previous surveys for both small and medium enterprises (SMEs) and corporates.

RAM’s survey also indicated that both corporates and SMEs were optimistic about their business prospects for the next six months.

It also showed the corporate segment’s stable sentiment, relative to the SMEs, was attributable to their economies of scale, operational flexibility, client bases and bargaining power to ride through short-term economic vagaries.

SMEs professed more volatile sentiment, in tandem with the greater uncertainties faced by their businesses, the survey found.

“Despite some downsides in business outlook among SMEs, corporates and SMEs have maintained overall positive sentiments going into 2018.

“This is especially so as firms have continued to express intention to expand capacity and keep up hiring and capital investments,” it said.

The survey suggested that agencies and regulatory authorities needed to continue to monitor SMEs’ performance and increase assistance to help firms overcome short-term challenges and uncertainties, if needed.