Business sentiment seen rising in first quarter of 2018

PETALING JAYA: Business optimism among Malaysian companies hit a new peak in the first quarter (Q1) of 2018 as growth momentum continues to pick up, according to Dun & Bradstreet (D&B).

Overall Business Optimism Index (BOI) jumped from +5.52 percentage points in Q4’2017 to +7.25 percentage points in Q1’2018. On a year-on-year basis, BOI rose from +1.65 percentage points in Q4’2017 to +7.25 percentage points in Q1’2018.

According to D&B , four of six indicators – volume of sales, selling price, inventory levels and employment levels rose on a quarter-on-quarter basis, except for net profit and new orders.

Compared with 2017, firms are more optimistic about investments in business expansion for 2018 as there is a significant rise in the number of firms expecting investments to increase from 8% in 2017 to 18% in 2018.

Meanwhile, the proportion of firms expecting investments to decrease fell from 21% in 2017 to 15% for 2018. Majority of local firms anticipated investments to remain unchanged at 67%.

Dun & Bradstreet (Malaysia) Sdn Bhd CEO Audrey Chia noted that the overall positive outlook bodes well for the business community in Malaysia for Q1’2018.

“Both services and transportation sectors have benefited from strong private consumption and government spending in public infrastructure. We expect the manufacturing sector to be boosted by sustained global demand for semiconductors and stronger export growth.”

She foresees local businesses becoming more optimistic about investments in business expansion in 2018.

Nonetheless, Chia said besides uncertainties and rising business costs, increased competition is one new area that has been identified as a key challenge for Malaysian companies.

D&B Malaysia conducts latest Business Expectations Surveys every quarter. For each quarter, 200 business owners and senior executives representing major industry sectors across Malaysia are asked if they expect increases, decreases or no changes in their upcoming quarterly sales, profits, employment, new orders, inventories and selling prices.

Source: The Sun Daily

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