KUALA LUMPUR: The operational outlook among Malaysia’s micro, small and medium enterprises (MSMEs) will remain resilient over the next six to 12 months, despite a weaker SME Sentiment Index reading for the first half of 2026 (1H26).
In a survey released yesterday, Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) said although the index fell to a historic low of 45.1 from 55.6 in 2H25, a majority of businesses still anticipate sales growth, continued expansion and ongoing marketing efforts.
“Notably, most MSMEs intend to maintain their current workforce rather than reduce headcount, suggesting that businesses view current challenges as cyclical and temporary, with concerns around future hiring costs and talent acquisition influencing their decisions,” it said.
According to SME Bank, the 45.1 reading, which fell below the 50-point threshold, indicated a contraction in MSME activity amid multifaceted challenges, including the US-Iran war, the US tariff dispute and domestic policy reforms.
Meanwhile, the survey showed that about 55% of exporters anticipated an increase in sales compared to 38% of domestic-oriented firms. — Bernama
