BANDAR SERI BEGAWAN: Brunei businesses ended 2025 on a cautiously positive note, with overall sentiment edging into expansionary territory in December, according to the latest Business Sentiment Index (BSI) released by the Brunei Darussalam Central Bank (BDCB).
The headline Current Business Conditions index stood at 50.3 in December 2025, slightly above the neutral 50 mark, signalling improved conditions compared to November. The one-month ahead index was 50.2, indicating that businesses remain broadly optimistic heading into January 2026.
The BSI, based on a survey of around 500 micro, small, medium and large businesses across 11 economic sectors nationwide, measures confidence in current and future business conditions, investment, employment and operating costs. Readings above 50 indicate expansion or optimism, while figures below 50 reflect contraction or pessimism.
Seasonal boost lifts sentiment
The marginal uptick in December was largely driven by seasonal factors, including public sector bonus payouts, year-end promotions and stronger consumer spending during the school holidays.
While some firms reported disruptions from active weather conditions, reduced domestic traffic due to overseas travel and project slowdowns, these were outweighed by positive sentiment from large businesses in key industries.
Looking ahead, businesses expect a return to normal operations after the holidays, alongside new project rollouts and early preparations for festivities such as Chinese New Year and Hari Raya Aidilfitri.
Investment outlook strengthens
Investment intentions remained firm. The current Investment sub-index registered 50.4, rising to 50.6 for one month ahead and 50.3 for three months ahead, reflecting expectations of higher capital spending in the coming months.
In December, investment was driven by year-end project completions, machinery purchases, equipment upgrades and renovation works. In the near term, businesses anticipate further increases, supported by restocking activities ahead of festive demand, new project commencements, tender awards, expansion of branches and continued machinery upgrades.
Employment slightly softer
In contrast, the Employment sub-index came in at 49.9 for both the current month and one month ahead, signalling mild pessimism.
The slight dip reflects staff turnover, end-of-contract departures and project completions, particularly in the Oil and Gas Related, Construction and Wholesale and Retail Trade sectors. While some businesses expect modest hiring linked to new projects and seasonal demand, others foresee workforce rationalisation and contract expirations.
Cost pressures ease
Operating costs rose modestly in December, with the Costs sub-index at 50.3, largely due to year-end bonus payments, salary increments, overtime and new project-related expenditures.
However, cost pressures are expected to ease in January, with the one-month ahead index at 49.8, as businesses anticipate a return to normal operations and lower marketing expenses after year-end campaigns.
Sectoral divide
Among sectors, Transport and Communication (50.9), Oil and Gas Related (50.5), Hotels and Restaurants (50.2) and Wholesale and Retail Trade (50.1) recorded optimistic readings.
Transport and Communication benefited from higher travel activity and data roaming demand during the school holidays.
Oil and Gas Related firms cited higher production levels and stable long-term contracts, while Hotels and Restaurants saw stronger occupancy rates from year-end events and inbound tourism.
On the other hand, Finance and Insurance (49.9), Agriculture, Forestry, Fisheries and Livestock (49.8), Real Estate (49.8), Manufacturing (49.8), Construction (49.7), Other Private Services (49.5) and Health and Education (49.4) registered contractionary readings.
Weather disruptions, project delays, slower contract awards, reduced domestic demand due to overseas travel and fewer student enrolments during the holidays weighed on these sectors.
Large firms more upbeat
By business size, large firms were the most optimistic at 50.3, supported by long-term contracts and increased year-end sales. Medium enterprises posted 50.1, while micro and small businesses registered a neutral 50.0, reflecting steady but unchanged activity.
The central bank said the BSI serves as a forward-looking indicator of macroeconomic trends and will continue to be monitored as an early gauge of business conditions in the Sultanate. - Borneo Bulletin/ANN
