POSITIVE INDICATORS
BUSINESS confidence in Malaysia has hit a three-year high with the growth outlook remaining expansionary for the third quarter of this year, says a Dun & Bradstreet study.
MALAYSIAN business confidence hit a three-year high for the third quarter (Q3) this year, according to Dun & Bradstreet (D&B) Malaysia’s Business Optimism Index (BOI) study.
Overall BOI increased from 12.58 percentage points in first quarter (Q1) to 13.17 percentage points in the second quarter (Q2) this year.
On a year-on-year (YoY) basis, BOI jumped significantly from 3.40 percentage points in Q3 last year to 13.17 percentage points in Q3 this year.
“We expect growth outlook for Q3 to remain on expansionary path, with majority of the sectors experiencing an uptick in sentiment compared with a year ago.
“Despite being the most optimistic sector, we are seeing some signs of moderation in the outlook for manufacturers due to weaker domestic and global demand in the recent months,” said D&B (Malaysia) Sdn Bhd chief executive officer Audrey Chia.
She said the uptrend in business optimism was expected to be sustained on improved domestic consumption resulting from the zero-rated Goods and Services Tax and the introduction of fuel subsidies.
The six business indicators under the quarterly BOI study include sales volume, net profit, selling price, inventory level, employees and new orders.
According to D&B Malaysia, two of six indicators climbed on a quarter-on-quarter (QoQ) basis.
New orders rose from 14.0 percentage points in Q2 to 19.5 percentage points in Q3 this year, while inventory levels jumped from 3.50 percentage points in Q2 to 18.0 percentage points in Q3 this year.
Sales volume and net profit eased slightly from 19.0 percentage points in Q2 to 18.0 percentage points in Q3 this year and from 16.0 percentage points in Q2 to 15.5 percentage points in Q3 this year.
Selling price fell visibly from 9.50 percentage points in Q2 to 1.0 percentage point in Q3 this year.
Employment levels decreased from 13.5 percentage points in Q2 to 7.0 percentage points in Q3 this year.
On a YoY basis, five out of six indicators have advanced for Q3 this year.
Sales volume rose from 3.88 percentage points in Q3 last year to 18.0 percentage points in Q3 this year.
New orders jumped from 8.74 percentage points in Q3 last year to 19.5 percentage points in Q3 this year, while inventory levels climbed from 4.85 percentage points in Q3 last year to 18.0 percentage points in Q3 this year.
Employment levels increased from 3.88 percentage points in Q3 last year to 7.0 percentage points in Q3 this year.
Net profits rebounded from the contractionary zone of -3.88 percentage points in Q3 last year to 15.5 percentage points higher in Q3 this year.
Selling prices moderated from 2.91 percentage points in Q3 last year to 1.0 percentage point in Q3 this year.
The survey also revealed that for Q3 this year, the manufacturing sector emerged as the most upbeat sector while the construction and transportation sectors were the least optimistic.
The financial sector was also one of the most optimistic sector, with three indicators climbing — selling prices, new orders and inventory levels.
However, employment levels, sales volume and net profits fell in Q3 this year from the preceding quarter.
The construction sector remains one of the least optimistic sectors, with only two indicators in expansionary zone for Q3 this year, while the transportation sector is least optimistic with none of the indicators in expansionary zone for Q3 this year.
BOI, released quarterly, is a business sentiment survey, designed to capture business expectations and is one of the most effective ways to track how the business community perceives the business environment and where it is moving.