KUALA LUMPUR: The Small, Medium Enterprise (SME) Sentiment Index rose to 56.8 in the second half of this year (2H25) compared with 55.1 in 1H25, signalling stronger economic momentum and rising optimism across the country’s micro, small and medium enterprise (MSME) landscape.
According to Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank), the improvement in the index reflects improved expectations on economic conditions, sales prospects, expansionary activity and employment despite elevated external pressures.
In a statement, SME Bank’s chief executive officer, Samad Majid Zain, said that Malaysian MSMEs continue to demonstrate resilience, supported by stronger economic fundamentals and opportunities.
“The rise in the sentiment index, with 68% of respondents expecting higher sales and 53% planning to expand their workforce, reflects a more positive operating climate even as the business community navigates higher external tariffs, wider sales and services tax and adjustments in electricity costs.
“The strongest optimism was recorded among manufacturing segments, where up to 89% of businesses anticipate growth. These trends signal that MSMEs are preparing for increased demand and renewed investment activity,” he said.
He added that the bank will continue to support MSMEs in strengthening their financial position, improving productivity and enhancing competitiveness as Malaysia advances toward sustainable economic growth.
Meanwhile, SME Bank’s head of economic analysis Mazlina Abdul Rahman said 58% of enterprises expect the economy to expand.
“Micro enterprises are the most optimistic at 65%, whereas only 44% of medium-sized firms expect growth, reflecting the impact of rising costs and external uncertainty,” she said.
She added that liquidity conditions had improved, with the proportion of MSMEs holding less than six months of reserves declining to 31% from 34%, and those with reserves beyond three years increasing to 15%.
“Financing appetite remains high, with 81% of respondents planning to obtain funding for working capital or expansion,” she said.
The SME Sentiment Index survey was conducted between July and October this year, involving 1,971 entrepreneurs and business owners across 40 sectors and all business sizes, and serves as a key reference point in assessing Malaysia’s economic trajectory. — Bernama
