Business confidence stabilises, but uncertainty remains
KUALA LUMPUR: The latest global survey from the Associat ion of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants ( IMA) of fers an early indication of how uncertainty will a f fect OECD economies, with business confidence subdued despite an improving outlook in the Asia-Pacific region. Responding to the findings of the Global Economic Conditions Survey ( GECS), David Chin, head of ACCA Malaysia said business conf idence has stabilised somewhat in Malaysia over the last three months, after a tough end to 2015. “This ha s been led by much stronger sentiment in China, where the sense of crisis that dominated the second half of 2015 has now faded,” Chin said in a statement yesterday. Although the survey findings points to the first signs of improvement, Chin expressed caution that Malaysia is not totally out of the woods yet.
“Now is not the time for complacency,” he added.
“Although we are seeing positive signs, businesses in Malaysia are undoubtedly still nervous about the future.
“Almost half or 47 per cent of respondents in Asia- Pacific reportedcutsincapitalexpenditure and declining orders (42 per cent) while, most worryingly of all, 60 per cent told us they were in the midst of a hiring freeze.”
According to Chind, the situation is unsurprising given the current volatility across the global markets: “Global trade is hugely important to Malaysia, and across the whole of the AsiaPacific region.
Along with Hong Kong and Singapore, we are among the most open economies in the world. It is no surprise, therefore, that the current events worldwide will impact the confidence of businesses here.”
In fact, Chin anticipates the potential impact of global events such as Britain’s decision to leave the European Union ( EU) will be felt globally for the foreseeable future.
“It would not be a surprise if business sentiment fell again in 3Q. The potential for long-term uncertainty as the UK negotiates its complex departure from the EU could weigh down on global confidence for some time to come.
“It is important that the UK Government act fast to come up with a plan for its trade links across the world and ACCA Malaysia is on hand to assist in any way we can.”
In the meantime, he advised that companies in Malaysia would do well to keep their business plans flexible and their finger on the global economic pulse so they can pounce on any opportunities that emerge out of this current climate.
Fieldwork for the Q2 2016 GECS took place between June 3 and 20, and attracted more than 1,200 responses from ACCA and IMA members around the world, including more than 130 CFOs. Nearly half the respondents were from small and medium enterprises, with the rest working for large firms of more than 250 employees.
This has been led by much stronger sentiment in China, where the sense of crisis that dominated the second half of 2015 has now faded. David Chin, ACCA Malaysia head