Businesses positive on Q2 prospects but remain cautious

KUALA LUMPUR: Businesses remain positive about their prospects for the second quarter (Q2) of 2022 as well as for the six-month period to September 2022, according to the Department of Statistics Malaysia's (DoSM) latest business tendency statistics.

Chief statistician Datuk Seri Mohd Uzir Mahidin said going into Q2, businesses were positive albeit at a slower pace, with a confidence indicator of +3.5 per cent for the quarter against +7.6 per cent in the first quarter (Q1).

"Despite the reopening of Malaysia’s international borders, which is anticipated to spur economic activities, businesses stay cautious on their prospects amid inflation pressure, supply chain and labour shortage issues,” he said in a statement today.

Except for construction, all sectors surveyed anticipated better business conditions in Q2 2022.

"The wholesale and retail trade sector is the most optimistic on business outlook. The sector's confidence indicator has increased for three quarters in a row, with +15.5 per cent in Q2 2022 from +4.0 per cent in the preceding quarter,” Mohd Uzir noted.

Based on the quarterly business tendency survey, brighter sentiment in both the wholesale trade subsector as well as retail trade subsector led to this improvement.

Meanwhile, the services sector predicted business situation to improve at a moderate rate, posting a confidence indicator of +5.6 per cent compared to +11.1 per cent in Q1 2022.

As for the industry sector, it expected its business performance to grow at a slower pace in Q2 2022 with an indicator of +0.8 per cent compared to +12.2 per cent in the preceding quarter.

The agriculture and mining subsectors, in particular, anticipated unfavourable business conditions in Q2, Mohd Uzir said.

Meanwhile, the construction sector remained pessimistic but its confidence indicator improved to -23.2 per cent compared with -40.4 per cent in Q1 2022.

DoSM said 45.2 per cent of the survey respondents predicted their gross revenue would rise in Q2 2022 while 19.0 per cent expected a reduction, leading to a net balance of +26.2 per cent.

The rest of the respondents (35.8 per cent) anticipated gross revenue to stagnate.

In the same quarter, 72.2 per cent of the businesses expected their manpower to stay the same despite showing a net balance of +10.8 per cent.

Of the businesses, 19.3 per cent intended to hire more manpower in Q2 2022, while 8.5 per cent planned a reduction.

On expectations of business performance for the upcoming six months (April to September 2022), Mohd Uzir said businesses also remained optimistic on their outlook with a net balance of +25.0 per cent, up slightly from the +18.9 per cent recorded previously.

This, he said, was attributed to better sentiments in the wholesale and retail trade, industry and services sectors. - Bernama

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