Improved Business Sentiment Q4 2020

 Business sentiment among Malaysian companies experienced a slight uptick for Q4 2020. According to Dun & Bradstreet (D&B) Malaysia’s Business Optimism Index (BOI) study, BOI rose by +0.50 percentage points from -13.33 percentage points in Q3 2020 to -12.83 percentage points in Q4 2020. On a year-on-year (y-o-y) basis, BOI fell by -22.41 percentage points from +9.58 percentage points in Q4 2019 to -12.83 percentage points in Q4 2020.

The six business indicators under the quarterly BOI study include volume of sales, net profits, selling price, inventory level, employees and new orders.

4 of the six indicators climbed upwards on a quarter-on-quarter basis.

  • Volume of sales inched up from -19.20 percentage points in Q3 2020 to -16.67 percentage points in Q4 2020.
  • Net profit increased from -22.40 percentage points in Q3 2020 to -20.63 percentage points in Q4 2020.
  • Selling price dropped from -7.20 percentage points in Q3 2020 to -11.90 percentage points in Q4 2020.
  • New orders jumped from -12.00 percentage points in Q3 2020 to -1.59 percentage points in Q4 2020.
  • Inventory levels plunged from -8.80 percentage points in Q3 2020 to -15.87 percentage points in Q4 2020.
  • Employment levels inched up minimally from -10.40 percentage points in Q3 2020 to -10.32 percentage points in Q4 2020. On a year-on-year (y-o-y) basis, all six indicators have fallen for Q4 2020.
  • Volume of sales plunged sharply from +23.33 percentage points in Q4 2019 to -16.67 percentage points in Q4 2020.
  • Net profits dipped from +9.17 percentage points in Q4 2019 to -20.63 percentage points in Q4 2020.
  • Selling price dropped from +0.83 percentage points in Q4 2019 to -11.90 percentage points in Q4 2020.
  • New orders dived from +21.67 percentage points in Q4 2019 to -1.59 percentage points in Q4 2020.
  • Inventory levels tumbled from -1.67 percentage points in Q4 2019 to -15.87 percentage points in Q4 2020.
  • Employment levels plunged from +4.17 percentage points in Q4 2019 to -10.32 percentage points in Q4 2020.

For Q4 2020, both manufacturing and services sectors have seen slight improvements while the construction and wholesale trade sectors are most pessimistic.

The improvement in consumer confidence and rebound in manufacturing activities over the last couple of months are signs of gradual recovery in certain sectors of the Malaysian economy. However, it is still premature to predict if sentiments will continue to experience an uptrend as the global economy is still reeling from the impact of the COVID-19 pandemic. With the emphasis on new sources of economic growth through the digitalization, upskilling and reskilling programmes targeted at key sectors for Budget 2021, we expect these new measures to enhance the resilience of the Malaysian business community and be better prepared to tide through the uncertainties ahead.” Audrey Chia, Chief Executive Officer, Dun & Bradstreet (Malaysia) Sdn. Bhd.

 

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