Business sentiment declines for 3rd straight quarter


Business sentiment among Malaysian firms continues to decline for the third consecutive quarter going into the second quarter of 2019 (2Q19) while displaying year-on-year (YoY) moderation, according to Dun & Bradstreet (M) Sdn Bhd’s (D&B Malaysia) Business Optimism Index (BOI) study.

The overall BOI dropped to +5.61 percentage points (ppts) in 2Q19, from +8.92ppts recorded in 1Q19.

However, YoY numbers showed strong moderation to +5.61ppts in 2Q19 from +12.58ppts posted in the previous year.

D&B Malaysia CEO Audrey Chia said the overall outlook has dampened for 2Q19 due to weakening external demand, lower public investments and slower growth pace in China.

“The outlook in the manufacturing, construction and wholesale sectors have been relatively downbeat.

“However, sentiments within the services and financial sectors will remain resilient on the back of strong consumer spending,” she said in a statement yesterday.

According to the study, only one out of six indicators measured by the study moved upwards on a quarter-on-quarter basis.

“Selling price rose to +6.83ppts in 2Q19 against +2.94ppts in the previous quarter, while new orders dropped to +10.24ppts from +15.88ppts posted in 1Q19.

“Both sales volume and net profits have moderated to +6.83ppts and +1.95ppts in 2Q19, from +7.06ppts and +8.82ppts respectively in the immediate preceding quarter,” it noted.

Inventory levels also lowered to +4.39ppts from +8.82ppts, while employment levels dipped to +3.41ppts from +10ppts in 1Q19.

However, on a YoY basis, only the inventory levels rose marginally to +4.39ppts in 2Q19, versus +3.5ppts in 2Q18.

Both sales volume and net profits dipped strongly, showing sales volume falling to +6.83ppts from +19ppts, while net profits declined to +1.95ppts, versus +16ppts.

Employment levels were also lower at +3.41ppts against +13.5ppts recorded in 2Q18.

Selling price had also fallen to +6.83ppts from +9.5ppts, while new orders moderated to +10.24ppts from +14ppts.

The services, transportation, and financial sectors were most upbeat as of 2Q19, while the wholesale trade, construction and manufacturing sectors were least optimistic.