KUALA LUMPUR: Business sentiment among Malaysian companies rebounded slightly in the third quarter (Q3) after falling in Q2 this year, according to Dun & Bradstreet (D&B) Malaysia’s Business Optimism Index (BOI) study.
The BOI inched upwards from +5.61 percentage points (pp) in Q2 2019 to +7.22 percentage points in Q3 2019. However, it moderated from +13.17pp in the third quarter of last year.
The six business indicators under the quarterly BOI study include volume of sales, net profits, selling price, inventory level, employees and new orders. This is the 26th D&B BOI study being released in Malaysia.
On a year-on-year (yoy) basis, only two of six indicators increased for Q3 2019. Selling price jumped from +1.0pp in Q2 2019 to +9.17pp in Q3 2019; while new orders climbed from +19.50pp to +25.83pp.
Volume of sales moderated downwards slightly from +18.0pp in Q2 2019 to +2.50pp in Q3 2019; net profits dived into the contractionary zone from +15.50pp to -5.0pp; inventory levels fell from +18.0pp to +5.0pp; employment levels dropped from +7.0pp to +5.83pp.
For Q3 2019, both manufacturing and services sectors are most upbeat about the outlook while the construction and transportation sectors are least optimistic.
The services sector has emerged as one of the most optimistic sectors with five indicators in the positive zone. However, majority of the indicators have moderated downwards.
The outlook within the manufacturing sector has improved, with five indicators in the positive zone for Q3 2019.
The agriculture sector is moderately optimistic with four indicators in the expansionary zone.
Meanwhile, the construction and transportation sectors are least optimistic.
Dun & Bradstreet (Malaysia) Sdn Bhd CEO Audrey Chia said the overall outlook has improved for Q3 2019 due largely to improvements seen within the agricultural and wholesale trade sectors as well as the relatively sound financial position of Malaysian companies.
“However, downside risks remain amid a slowdown in China as well as the escalation of trade-war tensions. This could also mean that exports would remain volatile. Furthermore, the key electronics sector will face increasing competition from lower-cost factories in Vietnam and higher-value-added production in China over the medium term,” she said in a statement.
In line with lower public spending and weaker export and investment growth, it expects economic growth should moderate to 4% in 2019.
