Busi­nesses, con­sumers less op­ti­mistic: Sur­vey

The Sun (Malaysia) - - SPEAK UP -

KUALA LUMPUR: Busi­nesses and con­sumers are less op­ti­mistic about the Malaysian econ­omy, a sur­vey by the Malaysian In­sti­tute of Eco­nomic Re­search (MIER) shows.

MIER’s third-quar­ter (Q3) Busi­ness Con­di­tions In­dex (BCI) dived 22.5 points to 83.9 points from 106.4 points in Q2 on the back of a slow­down in sales and pro­duc­tion, de­clin­ing lo­cal and ex­port or­ders and rising stock lev­els.

The Con­sumer Sen­ti­ments In­dex (CSI), mean­while, was down by 5 points quar­ter-on-quar­ter to 73.6 points in Q3 due to unin­spir­ing em­ploy­ment and fi­nan­cial out­look. This is the ninth con­sec­u­tive quar­ter that the CSI has re­mained below the 100-point thresh­old level of con­fi­dence.

Even though con­sumers are gen­er­ally low-spir­ited about the econ­omy and job prospects, MIER said the de­cline in the CSI, sur­pris­ingly, does not por­tend any ma­jor let-up in spend­ing pat­terns in the com­ing months.

A to­tal of 1,020 house­hold­ers were in­ter­viewed for the sur­vey.

Mean­while, MIER said a plunge in all ar­eas of man­u­fac­tur­ing ac­tiv­i­ties led lo­cal man­u­fac­tur­ers to be some­what pes­simistic.

“A slug­gish out­look is ex­pected in the next three months with the Ex­pec­ta­tion In­dex (E1), also hav­ing lost sig­nif­i­cantly by 25.9 points to stay at 90.9 points,” it said.

The BCI is an arith­metic av­er­age of the pro­por­tion of pos­i­tive re­sponses to eight ques­tions con­tained in a ques­tion­naire mailed to 300 busi­ness or­gan­i­sa­tions.

Even though global prospects are not en­cour­ag­ing, MIER ex­ec­u­tive di­rec­tor Dr Zakariah Ab­dul Rashid said, the gross do­mes­tic prod­uct (GDP) growth fore­cast is main­tained at 4.2% for 2016 as the short­com­ing is ex­pected to be com­pen­sated by bet­ter do­mes­tic de­mand.

“As for 2017, GDP growth is ex­pected to edge up mod­er­ately in the range of 4.5% to 5.5%,” he noted.

Nonethe­less, Zakariah ex­pects Malaysia’s net ex­ports to con­tinue to be in neg­a­tive ter­ri­tory for the year with an es­ti­mated con­trac­tion of 0.5% as ex­ter­nal de­mand re­mains slug­gish. This com­pares with its ear­lier pro­jec­tion of a 1.2% rise in net ex­ports.

Zakariah said the down­ward re­vi­sion in net ex­ports from 1.2% growth was due to the fail­ure of global re­cov­ery to gain mo­men­tum as oil prices re­mained below US$50 (RM209.78) a barrel. The pro­jec­tion, how­ever, is still bet­ter than the 3.8% con­trac­tion last year.

Al­though the cur­rent ac­count bal­ance is ex­pected to de­te­ri­o­rate this year to 1.8% of gross na­tional in­come, it will re­bound in 2017 in an­tic­i­pa­tion of im­proved ex­port de­mand. -

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