Malaysian biz confidence dips slightly in Q2

Source from (The Sun Daily): http://www.thesundaily.my/news/456613

Published: August 09, 2012
Karen Arukesamy
sunbiz@thesundaily.com

PETALING JAYA (Aug 6, 2012): A survey of business confidence in Malaysia showed a slight drop for the second quarter of this year, compared with the first quarter.

Radar Global, a Hong Kong-based market research agency, said the Business Confidence Index (BCI) among micro, small and medium enterprises (MSMEs) in Malaysia dropped to 59.5 in the April-June period from 62.7 in the first three months.

The findings are based on 4,600 interviews with finance managers and other business leaders of companies with fewer than 250 employees during the first two quarters of 2012.

It is the first quarterly sentiment index of business confidence, economic outlook and bank reputation among MSMEs in seven emerging markets, namely China, Egypt, India, Malaysia, the Philippines, Thailand and the United Arab Emirates (UAE).

Apart from Malaysia, the BCI for India, China and Thailand also showed a decline in Q2 from Q1, while that for the Philippines, the UAE and Egypt was up slightly.

"Despite the small decline of BCI in four countries, the net outlook is still positive in all countries. Net outlook is calculated as a percentage of positive response minus the percentage of negative response," said Radar Global co-founder and director Grant Beuzeval in a statement.

He said most respondents still believe their country's economy is improving. Respondents in the Philippines, for example, had the highest confidence with 31% expecting a significant improvement and only 2% expecting any kind of deterioration.

"In Malaysia, although 90% of respondents were positive about their own company's financial prospects, only 36% were positive about the country's economy over the next 12 months," said Beuzeval.

"Start-ups comprising businesses with less than five years of establishment, were the most optimistic about the economy, while the older companies of above 31 years were the least optimistic."

The survey also revealed that the most optimistic sectors for continued improvement in Malaysia's economy were the construction (45%) and transport sectors (42%), while 23% of respondents expect the trade sector (wholesale and retail) to experience some deterioration.

"About 40% of companies expect their workforce (head count) to increase over the coming 12 months, 55% expect it to remain about the same and only 5% expect shrinkage," Beuzeval said.

Asked about the three main barriers to local businesses, 46% of Malaysian MSMEs surveyed cited corruption, 39% red tape and 33%, a shortage of labour.

According to the Malaysian respondents, the three biggest issues facing global business were the European recession (43%), rising oil prices (40%) and global recession (38%).