KUALA LUMPUR (July 11): Malaysian businesses remained broadly optimistic for the second consecutive quarter, and sentiment improved on the back of better outlook on sales, a survey showed.
RAM-CTOS Business Confidence Index (BCI) rose 54.0 in the second quarter (2Q2024), from 53.4 in the first three months of 2024 (1Q2024), according to the survey jointly conducted by RAM and CTOS Digital Bhd (KL:CTOS). A reading above 50 indicates positive sentiment, and below 50 points indicates negative sentiment.
“It is heartening to see positive sentiments in consecutive quarters, which bucks the trend of the past year,” Erick Hamburger, chief executive officer of CTOS, said in a statement.
Both corporates and small-and-medium enterprises (SME) remained optimistic. Respondents were more sanguine about their business performance outlook, with quarter-on-quarter improvement in sales sub-index.
However, profitability sentiment remains relatively soft at 50.5, just above the 50 neutral mark, amid ongoing cost pressures. Rising cost of doing business continues to top the list of challenges cited by nearly 80% of the 109 respondents, RAM-CTOS flagged.
Businesses shrug off diesel subsidy retargeting
The survey, conducted from May 27 to June 18 this year, also shows that the recent diesel subsidy retargeting did not appear to have dented sentiment, RAM-CTOS noted.
Responses received before the policy implementation point to sentiment index for corporates at 58, and rose to 60.7 after the policy was implemented on June 10. Sentiment of small and mid-sized enterprises (SMEs) meanwhile, were marginally lower at 52.2, from 52.9 prior to the implementation.
More than two-thirds of the 109 firms polled expect price increases for their products or services, if the talked-about subsidies withdrawal for RON95 — the most widely-used petrol variant — is implemented. Around 70% of respondents reported that RON95 makes up to 10% of their overall business costs.
Firms however, are most concerned about the impact of higher labour costs from the implementation of the progressive wage policy, cited by around 61% of firms. Despite concerns, about 78% of firms foresee some benefits from the adoption of the policy, including enhanced employee morale and satisfaction.
The survey also highlighted that “efforts to educate and market it to businesses can be further improved,” as some 52% of respondents have heard of the policy but are not familiar, while almost a quarter stated that they are not aware of it at all.
RAM Holdings chief executive officer Chris Lee said the policy has potential benefits of a restructured wage system that links wage increases to training and upskilling. “However, a more broad-based adoption is needed to realise its full benefits to the nation as a whole,” he added.
Source: https://theedgemalaysia.com/node/718574