KUALA LUMPUR, May 26 — Businesses anticipate a softer second quarter 2026 (2Q 2026) outlook with the confidence indicator easing to negative 1.8 per cent from 4 per cent in the previous quarter, according to the Statistics Department Malaysia (DoSM).

In a statement today, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the construction, wholesale and retail trade, and industry sectors are expecting less favourable business performance in the quarter reviewed, indicating that businesses remain cautious amid a challenging business environment and global uncertainties.

“The services sector continues to maintain a positive outlook for 2Q 2026, benefiting from continued government support measures that preserve consumers’ purchasing power and facilitate business activities, particularly in domestic-driven service sectors,” he said in conjunction with DoSM’s release of the Business Tendency Statistics for 2Q 2026.

Mohd Uzir said the construction sector turned pessimistic, with the confidence indicator registering negative 9.5 per cent in 2Q 2026 against 1.4 per cent in the previous quarter.

The confidence indicator for the wholesale and retail trade sector declined to negative 7.5 per cent in the quarter reviwed while the industry sector projected a weaker performance, with a confidence indicator of negative 3.7 per cent against a positive 3.3 per cent in 1Q 2026.

“The services sector expects business performance to remain optimistic, with a confidence indicator of 6.2 per cent against 6.6 per cent in the previous quarter,” he said.

Mohd Uzir said mixed business expectations were also observed across states, indicating varying economic prospects.

Johor recorded a confidence indicator of 1.2 per cent, Kedah (3.2 per cent), Kelantan (3.8 per cent), Negeri Sembilan (1.9 per cent), Perak (0.9 per cent), Selangor (0.2 per cent), and Terengganu (5.5 per cent).

A pessimitic lull is over Melaka with the confidence indicator at negative 9.1 per cent, Pahang (- 7.1 per cent), Penang (- 5.2 per cent), Perlis (- 7.1 per cent), Sabah (- 7.6 per cent), Sarawak (- 5.9 per cent), Kuala Lumpur (- 2.8 per cent), Labuan (- 9.5 per cent), and Putrajaya (- 2.3 per cent).

Business sentiment between April and September 2026 remains optimistic with a net balance metric easing to 7.9 per cent from 10.8 per cent previously while the industry sector has a net balance of 13 per cent, up from 6.2 per cent previously.

Services sector business sentiment remains positive, with a 7.5 per cent net balance against 20.6 per cent from January to June 2026.

Mohd Uzir expects a decline in business conditions in the construction sector, as reflected by a negative 5.4 per cent net balance versus 12 per cent previously.

Concurrently, subdued sentiment was recorded in the wholesale and retail trade sector, with a negative 1 per cent net balance against 6.9 per cent previously.

About 33 per cent of businesses expect 2Q 2026 gross revenue to rise, 43 per cent unchanged and 24 per cent expects a decline, resulting in a net balance of 9 per cent for the reference quarter.

Meanwhile, 14.7 per cent of businesses project employment to rise, 75.8 per cent expect to maintain their workforce and 9.5 per cent expect a fall, contributing a 5.3 per cent net balance in 2Q 2026, he added. — Bernama