Business confidence in Malaysia remains marginally optimistic for 3Q

KUALA LUMPUR: Business confidence in Malaysia remained marginally optimistic in the third quarter (Q3) of this year, said Dun & Bradstreet (D&B) Malaysia Sdn Bhd.

The finding was based on its Business Optimism Index (BOI) study. Overall, Malaysia’s BOI inched slightly from +3.07 percentage points in the second quarter to +3.40 percentage points in this quarter, D&B said in a statement today.

“On a year-on-year (y-o-y) basis, the BOI eased from +4.42 percentage points in Q3 2016 to +3.40 percentage points in Q3 2017. The six business indicators under the quarterly BOI study included volume of sales, net profits, selling price, inventory level, employees and new orders,” it added.

On y-o-y basis, D&B said the selling price increased moderately from +0.5 percentage points in in the same quarter last year to +2.91 percentage points this quarter, as inventory levels climbed from +1.5 percentage points to +4.85 percentage points.

Employment levels jumped from +3.0 percentage points to +3.88 percentage points.

It said, however, sales volume dropped from + 6.0 percentage points in the third quarter 2016 to +3.88 percentage points in this quarter, while new orders fell slightly from + 9.0 percentage points to +8.74 percentage points. Net profits fell into the contractionary zone from +6.50 percentage points to -3.88 percentage points.

Chief Executive Officer Audrey Chia said the continued optimism displayed by Malaysian businesses in the quarter, particularly in the services sector was largely due to the spurt in private investment growth, firmer private consumption and higher government spending, which in turn fuelled domestic demand.

“Credit growth has remained buoyant with the manufacturing and transportation sectors recording the fastest growth.

“However, some measure of fiscal restraint will weigh on the Malaysian economy in the coming quarters, as the government strives to keep its budget deficit target to 3.0 per cent of gross domestic product for this year.

“The recent downward moderation of commodity prices has also posed downside risks to the growth outlook, given that Malaysia is a large net oil exporter and producer of other commodities. Hence, we anticipate sentiment within the mining sector to remain muted,” she added. — Bernama