Better business performance seen

> Confidence indicator points to slight increase in fourth quarter, reports Statistics Department

PETALING JAYA: The business performance in the fourth quarter of 2016 is expected to increase slightly as recorded by the confidence indicator of +0.1%, according to the Statistics Department.

Confidence indicator is a shortterm indicator which summarises the overall views of business situation in various sectors in Malaysia. The confidence indicator is computed as the average of the net balance for selected variables.

The business performances for industry and services sectors are expected to increase in fourth quarter 2016 with confidence indicators of +4.2% and +2.6% respectively. Meanwhile, the construction and wholesale & retail trade sectors are expected to decline in the same quarter at -18.8% and - 16.0% respectively.

Forecast in the fourth quarter of 2016 showed 29.0% of establishments covered in this survey expect an increase in gross revenue while 21.7% of establishments foresee a decrease. Meanwhile, 49.3% of establishments predict unchanged gross revenue.

The gross revenue in the fourth quarter of 2016 is expected to rise with net balance of +7.3%, denoting more favourable responses.

In terms of number of employees, 21.9% of establishments predict an increase while, 10.1% of establishments predict a decrease in the fourth quarter of 2016. The magnitude of the positive net balance for the number of employees in the same quarter is lower, which is +11.8% than +14.9% registered in the third quarter of 2016.

Meanwhile, the business performance in October 2016 to March 2017 is expected to increase with a net balance of +6.0%. The industry and services sectors are expected to increase with the net balance of +10.5% and +16.0% respectively. On the other hand, the construction and wholesale & retail trade sectors are expected to decline with net balance of -29.4% and -22.1% respectively.

According to Business Tendency Statistics, the current situation of business performance in third quarter 2016 is lower with an overall net balance of all sectors - 5.8% as compared to -2.3% in the previous quarter.

More than half of the establishments (61.2%) reported the current situation of their business to remain the same. Meanwhile, 16.5% of establishments showed improvement in their business climate while 22.3% of establishments showed less favourable conditions.

In the third quarter of 2016, the establishments reported that their gross revenue showed a decrease with a net balance of - 3.5% as compared to +4.8% in the previous quarter. The establishments which reported increases in their business gross revenue in the third quarter of 2016 were 28.4%. In contrast, 31.9% of establishments reported deterioration. Meanwhile, 39.7% of establishments have stated their business gross revenue remain the same.