Biz confidence remains positive for 4Q24

The manufacturing sector demonstrates a stable trend in production volume, with over 70% of respondents reporting a stable and positive trend (pic: TMR)

Sectors such as manufacturing and repair, and installation of machinery and equipment exhibit strong performance

by RUPINDER SINGH

BUSINESS confidence for the fourth quarter of 2024 (4Q24) remains positive, with the Business Confidence Index (BCI) reaching nearly 105 points in 3Q24, according to the Malaysian Institute of Economic Research (MIER).

MIER identified stable production and sales, improved employment levels, rising wage costs, increased investments and better capacity utilisation efficiency as key drivers of this optimistic outlook.

“Business outlook for the next three months remains positive, with most firms optimistic due to Malaysia’s favourable image,” it said.

The report also highlighted that overall sales performance in 3Q24 was positive, with the index rising by 8.9 points to 52.8 compared to 3Q23.

“The quarter-on-quarter index performance also saw a significant increase, rising by 17.1 points to 52.8 in 3Q24 against 35.7 points in 2Q24,” it said.

The survey found that 53% of firms with a mixed composition of domestic and export markets enjoyed healthy sales, while 13% of domestic-oriented firms and 27% of export-oriented firms reported steady sales.

Sectors such as manufacturing and repair, and installation of machinery and equipment exhibited strong performance.

“Driven by healthy sales performance, domestic orders strengthened in 3Q24, rising by 13.8 points to 50 points compared 3Q23. Over 70% of firms enjoyed an increase in domestic orders or maintained a stable position,” it added.

MIER attributed this favourable outcome to the exceptional performance of key subsectors such as machinery and equipment, leather and related products, and food processing.

Exporters also experienced an improvement in export orders, which rose by 16.7 points to 48 points compared to 3Q23, with more than 60% of firms reporting either an increase in export orders or a stable performance.

“The manufacturing sector demonstrated a stable trend in production volume, with over 70% of respondents reporting a stable and positive trend,” it said.

Inventory levels also rose, gaining 10 points to 64.8 points in 3Q24, with more than 80% of firms involved in both domestic and export markets reporting stable inventories.

In the report, MIER noted that investment experienced an increasing trend, with a year-on-year (YoY) gain of 18 points to 68 points in 3Q24, and over 70% of firms operating in both domestic and export markets reported stable investment levels.

Capacity utilisation also improved, rising by 3.9 points YoY to 42.5 in 3Q24, with more than 80% of companies operating within the 61%-100% range.

Employment levels showed a positive trend, rising by 14.3 points to 56.5 in 3Q24. Despite a decline in wage costs, with a YoY decrease of 2.8 points to 72.2 points in 3Q24, MIER said local sales prices remained stable, as 70% of manufacturers reported no changes.