KUALA LUMPUR, July 23 — Business confidence among Malaysian firms weakened in the first half of 2026, with the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) Business and Economic Conditions Survey (M-BECS) showing companies grappling with rising costs, external uncertainties and a more challenging operating environment.

ACCCIM president Datuk Ng Yih Pyng said the M-BECS’ Business Condition Index (BCI) fell to 78.5 in the first half of 2026, while the Business Sentiment Index (BSI) signals cautious optimism for the latter half of the year.

“External factors, such as the military conflict in the Middle East, energy price volatility and supply chain disruptions, coupled with persistent cost pressures, are significantly impacting business confidence.

“While there is an expectation for external conditions to stabilise gradually, concerns regarding rising operational costs, access to financing, and an uncertain business environment remain prevalent,” he told a press conference at Wisma Chinese Chambers here.

Lee Heng Guie, executive director of the Socio-Economic Research Centre (SERC), a think tank attached to the chamber, said cost pressures remained the biggest challenge for businesses in the first half of the year, as confirmed by the latest survey findings.

He said one-third, or 34.4 per cent, of respondents felt economic conditions had worsened, while 34.6 per cent reported a deterioration in the business environment in the first half of 2026, with weaker sentiment recorded across most sectors.

Moreover, he said the BSI is expected to decline by 12.4 points to 94.9 in the second half of 2026, reflecting lingering concerns over the spillover impact of disruptions to the global supply of energy and other key inputs amid the escalation of the United States-Iran conflict.

Separately, Ng said rising cost pressures had been a persistent issue for businesses in recent years, with the escalation of the conflict further exacerbating the challenges.

“When consumer sentiment slowed down subsequent to the war, it really hindered the whole situation including the supply chains.

“A lot of industries are experiencing different impacts, from diesel to availability of raw material.

“So when we did the survey in June, more or less the impact is at its peak and until things get better, businesses will be very cautious,” he said.

While lauding the federal government’s efforts to expedite long-delayed tax refunds, Ng also stressed that timely refunds remained crucial for businesses to reinvest and ease cash flow pressures during these challenging times.

“Although it has improved, but as far as I know, there are still more refunds pending.

“So we hope the government will also continue this effort which during this time I think is very crucial,” he said.

As 91.3 per cent of survey respondents were primarily domestic-oriented businesses, while 65.7 per cent were from the services sector, Ng said the key findings would help shape constructive feedback for the federal government as the chamber continues its efforts to collaborate with relevant ministries to enhance Malaysia’s economic resilience and business competitiveness.

The survey polled 791 businesses between June 4 and June 30.