Confidence level among M’sia biz leaders at 3-year high in 2017


Optimism among Malaysian business leaders in 2017 surged to its highest level in three years, said Grant Thornton Malaysia.

In its International Business Report (IBR), the firm revealed that the optimism level in Malaysia rose to 6%, a major improvement since 2014, compared to a -36% in 2016.

“In Malaysia, signs of confidence can be seen as the survey revealed that 62% (of) business owners are expecting an increase in revenues, up 22 percentage points from the third quarter of 2017 (3Q17),” country managing partner Datuk NK Jasani said.

In a statement yesterday, he said 58% business owners are also expecting an increase in profits, up 46 percentage points, and 30% of business owners are looking to increase in selling prices, up 14 percentage points from 3Q17.

Jasani said the study revealed that 44% of business owners are expecting an increase in exports for 2018, an increase of 10 percentage points from 3Q17 and the highest in Asean.

The study found that Malaysian business owners are planning to spend more on plant and machinery, up 16 percentage points to 54% from 3Q17.

According to Jasani, this is the highest among Asean countries and way above the global average of 36%.

Despite recording a substantial increase in confidence level, the IBR nonetheless reflected some areas of concern for business owners in Malaysia.

“The Asean region optimism level is performing at its best at 58%, the highest since 2011.

“The study revealed that high levels of confidence are driven particularly by surges in Indonesia, (100%), and the Philippines (86%), where optimism has risen by 12 percentage points and six percentage points respectively over the same period,” he added.

This has reflected Malaysian business leaders’ confidence level being the lowest among Asean countries, Jasani noted.

“Business owners have expressed some constraints in their business for the year ahead, whereby a lack of skilled workers is a concern, at 46%, up 12 percentage points from 3Q17.

“Half of the business owners surveyed (54%), and the highest number in Asean, mentioned the exchange-rate fluctuations is a major constraint to them,” Jasani added. The quarterly business survey showed that growth initiatives that businesses are most likely to implement during the next 12 months include improving salesforce effectiveness (50%), as well as boosting productivity improvements (48%) and expanding business domestically (36%).

Jasani believes that there are signs that 2018 marks the peak of the business and economic cycle.

“The US is expected to increase its interest rate further, which means the cost of borrowing will rise for many businesses.

“At the same time, inflationary pressure is a strong possibility, with wages and prices also increasing.

“Forecasts suggest that global gross domestic product will fall away from 2019 onwards,” he said.

He said a better balance in where they invest will be critical and dedicated investment in technology will help businesses become more productive and boost resilience.

“Firms that get this right over the next year will be best placed to succeed when the global economy comes off its current high,” Jasani said.