KUALA LUMPUR: Business confidence in Malaysia is expected to remain moderately upbeat in the first quarter of 2017 despite signs of a downward moderation.
The Dun and Bradstreet (D&B) Malaysia's Business Optimism Index (BOI), overall, remained in the expansionary region, but slipping for the third consecutive quarter from 3.83 percentage points in fourth quarter 2016 to 1.65 percentage points in first quarter 2017.
The six business indicators in the quarterly BOI included volume of sales, net profits, selling price, inventory level, employees and new orders.
Four of the six moderated downwards, while two improved in the first quarter 2017 on a quarter-on-quarter (q-o-q) basis.
"Both net profits and employment levels fell into negative territory q-o-q. Net profits fell from 7.0 percentage points in fourth quarter 2016 to minus 5.94 percentage points in first quarter 2017, while employment slipped from 2.50 percentage points to minus 0.99 percentage points," D&B said in a statement on Monday.
It said the volume of sales moderated downwards visibly from 7.0 percentage points to 0.99 percentage points, and new orders similarly declined from 5.50 percentage points to 1.98 percentage points.
Meanwhile, both selling price and inventory levels improved q-o-q.
Selling price rose from 0.50 percentage points to 9.41 percentage points and inventory levels jumped from 0.50 percentage points to 3.47 percentage points.
D&B added that on a year-on-year basis, BOI fell moderately from 4.75 percentage points in the first quarter 2016 to 1.65 percentage points in first quarter 2017.
Dun and Bradstreet (Malaysia) Sdn Bhd chief executive officer Audrey Chia said: "Moving into 2017, we expect Malaysian businesses to err on the side of caution in their investment decisions for expansion plans.
"Global economic uncertainties, higher business costs and reduced sales are some of the key challenges which have been highlighted by local firms."
The survey, conducted quarterly, includes respondents from 200 business owners and senior executives representing major industry sectors across Malaysia. - Bernama
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