However, the study says 5 of 6 indicators have risen upwards for 4Q18 on a YoY basis

By SHAZNI ONG / Pic By TMR

Business sentiment among Malaysian companies has dipped slightly in the final quarter of 2018 (4Q18) from +13.17 percentage points in 3Q18 to +12.99 percentage points.

In a statement released yesterday, Dun & Bradstreet (D&B) Malaysia Sdn Bhd noted that based on its latest quarterly Business Optimism Index (BOI) study, the BOI had jumped significantly from +5.52 percentage points in 4Q17.

The six business indicators under the quarterly BOI study include volume of sales, net profits, selling price, inventory levels, employees and new orders.

D&B said four of its six indicators have climbed upwards on a quarter- on-quarter basis.

“The volume of sales climbed visibly from +18 percentage points in 3Q18 to +25.98 percentage points in 4Q18. Net profits inched up marginally from +15.5 percentage points in 3Q18 to +15.69 percentage points in 4Q18.

“Employment level rose from +7.0 percentage points in 3Q18 to +9.8 percentage points in 4Q18. Selling price jumped significantly from +1.0 percentage point in 3Q18 to +7.35 percentage points in 4Q18,” it noted.

Meanwhile, the two indicators that have fallen in 4Q18 were both the new orders and inventory levels.

“New orders slid from +19.5 percentage points in 3Q18 to +17.16 percentage points in 4Q18. Inventory levels dropped from +18 percentage points in 3Q18 to +1.96 percentage points in 4Q18,” said D&B.

However, D&B said five of its six indicators have risen upwards for 4Q18 on a year-on-year (YoY) basis.

“Volume of sales leaped from +5.03 percentage points in 4Q17 to +25.98 percentage points in 4Q18. Net profits rose from +5.53 percentage points in 4Q17 to +15.69 percentage points in 4Q18.

“Selling price climbed from +4.52 percentage points in 4Q17 to +7.35 percentage points in 4Q18. New orders jumped from +7.54 percentage points in 4Q17 to +17.16 percentage points in 4Q18.

“Employment level increased from +4.0 percentage points in 4Q17 to +9.8 percentage points in 4Q18,” D&B said, adding that the inventory level was the only one that fell from +6.53 percentage points in 4Q17 to +1.96 percentage points in 4Q18.

Based on its sectoral outlook, manufacturing and services have emerged as the most upbeat sectors, while the construction sector is the least optimistic for 4Q18 with only two indicators in the positive zone.

“As with 3Q18, the manufacturing sector is the most optimistic with six indicators in the positive zone. However, four of the six indicators have moderated downwards.

“The services sector has also emerged as one of the most optimistic sectors with all six indicators in the positive zone. Four of the six indicators showed improvements from the previous quarter,” it noted.

However, D&B said the financial sector saw downward moderations with three indicators, despite remaining as one of the most optimistic sectors.

It added that the wholesale sector displayed moderations in its outlook for 4Q18 with four indicators moving downwards.

D&B also noted the transportation sector has remained downbeat with only two indicators in the expansionary zone.

“Compared to the previous quarter, the sector saw increases in four indicators,” it said.

D&B CEO Audrey Chia said there were stronger signs of moderation across key sectors such as manufacturing, finance and wholesale trade for 4Q18.

“The local economy will continue to be exposed to global uncertainties on the external front including rising trade tensions and weaker public investments on major infrastructure projects.

“However, we expect the outlook among Malaysian firms to remain relatively healthy in light of sustained improvements in domestic demand and growth among the key Asean economies,” Chia said.