KUALA LUMPUR, Aug 10 — The Malaysian Institute of Economic Research’s (MIER) quarterly business confidence report showed a decline in the second quarter, ending the improvement from the first three months of 2023.
MIER’s Business Conditions index (BCI) was at two-year low after it dropped 13 points to 82.4 points, the lowest level since the second quarter of 2020.
On a yearly basis, the BCI dropped 13.8 points from 96.2 points.
“The drop in BCI in 2Q 2023 indicates that the private sector is pessimistic over business conditions in the near term.
“This was reflected in negative indicators in sales, employment and inventory levels, among others,” said MIER in a statement today.
MIER concluded that the ongoing global uncertainties coupled with elevated inflation and supply chain disruption has placed Malaysia in a vulnerable position.
“It is important that Malaysia, as a small and open trading economy, figure out solutions to address these concerns,” it said.
The survey for MIER's BCI covers a sample of over 350 manufacturing businesses incorporated locally and foreign manufacturing firms operating in Malaysia.
Similarly, the MIER Consumer Sentiment Index (CSI) continued its negative trend in the same period, decreasing 8.4 points to 90.8 quarter-on- quarter.
However, it was 4.8 points higher than the same period last year.
MIER said the negative trend was also observed in the employment index.
“It declined 7.4 points q-o-q to 102.4 points from 1Q 2023 and 7.8 points y-o-y from 2Q 2022.
“The increasingly pessimistic outlook is also reflected in other aspects of the survey such as respondents’ expectations on future job opportunities, income growth and projected inflation,” it said.
The MIER added that consumers displayed greater pessimism towards this year’s economic environment, reflected by their negative outlook on future finances, incomes, jobs and inflation levels.
As the global economy has not shown signs of recovering soon, MIER is calling for the government to consider measures that would instill greater confidence in jobs and income growth among Malaysians.
A total of 1,014 households were interviewed for the CSI survey.