Business confidence in Malaysia remains steady

KUALA LUMPUR: Business confidence in Malaysia outperformed that of Singapore and other regional trading partners in the third quarter of the year.

The performance was in tandem with the improved confidence in China, the region’s biggest economy, according to the latest Global Economic Conditions Survey (GECS).

The survey is jointly carried out by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants.

However, head of ACCA Malaysia David Chin said concerns on rising household debt was predominantly observed in Malaysia, Singapore, South Korea, and Thailand, preying on overall prospects within the region.

“Thus, the affordable housing incentives and enhanced tax incentives announced in the recent Budget 2017 will have significant implications.

“It is also a positive nudge towards addressing this household debt strain,” he said in a statement yesterday.

On the global front, Chin said the survey showed that business confidence was at a 12-month high in the same quarter, boosted by increased prospects of government spending and recovery in China and North America.

“Despite the improvements in confidence, the world has yet to see it translate into a meaningful boost to hiring and investment,” he added.

He cited the survey as indicating that only 19% of companies considered hiring new staff, while 14% were looking at opportunities to invest in new technology.

“In every region, there are more businesses planning to cut staff rather than hire more,” Chin said.

He suggested Malaysia could learn from the Organisation for Economic Cooperation and Development (OECD) to improve the investment driving confidence.

“Across the OECD, there is a strong correlation between governments reaching for their wallets, following years of austerity and improving confidence.

“This underlines the importance of investment to support economic growth,” he said. – Bernama