Overall business
sentiment has shown meaningful improvement among local manufacturers spurred by
a remarkable level of confidence in the fourth quarter of 2020, a survey
conducted by the Malaysian Institute of Economic Research (MIER) revealed.
In its survey titled
Fourth Quarter‘Business Conditions Survey Report’, MIER said the Business
Conditions Index (BCI) has recovered tremendously, increasing by 29.1 points to
settle at 115.4 points.
“It is in line with the
speedy recovery of 25.3 points in the third quarter of 2020.
“It is encouraging to
note that the index for the current quarter is above the threshold level,
indicating an increase in business sentiments,”it said, citing an increase in
domestic demand as well as export demand, which affected sales.
In its summary of the
survey results, the report said manufacturers continued to have optimistic
expectations of domestic orders, export orders, production volume, employment,
as well as domestic sales prices for the next three months.
“They are expecting the
economic recovery to be far better in the first quarter of 2021, in line with
Budget 2021,”MIER concluded.
The report also
attributed the favourable outlook to the successful impact of both the Prihatin
Rakyat Economic Stimulus Package (Prihatin) and the National Economic Recovery
Plan (Penjana) announced by the federal government to mitigate the effects of
Covid-19 by helping the business sector to remain afloat.
Amid heightened level of
confidence amongst manufacturers, the report also pointed out that a positive
outlook was expected in the quarter ahead as the Expected Index (EI) increased
markedly by 10.2 points and settled at 109.9 points, which is above the
threshold.
“The upward movement in
the EI can be credited to the positive reading in expecting domestic and export
sales, production volume, and employment as in line with the previous
quarter,”it said.
According to the report,
the improved business sentiment was also attributed to the upward trends in
domestic and export orders, with almost half of the respondents at 44 per cent
experiencing good sales performance in this quarter (Q4 2020) as compared to
the previous quarter of 21 per cent.
“Domestic orders
continued the upward trend of 22.5 points from the previous quarter (26.0
points from the second quarter of 2020) to settle at 66.1 points.
“On a Year-on-Year basis,
the domestic orders index increased substantially by 30.7 points.
For export orders, the
survey recorded a double increment of 20.9 points as compared to the previous
quarter (10.4 points) to settle higher at 60.7 points, while it had increased
drastically by 25.9 points on a yearly basis accordingly.
“Almost 46 per cent of
the manufacturers (timber, chemicals, pharmaceutical, machinery, medical
equipment, timepiece and furnitures) revealed an increase in export orders.
“Conversely, only a
quarter of respondents (25 per cent) comprising beverages and metal products
sectors exhibited a decrease in the readings as compared to half of the
respondents in the third quarter of 2020,”it said.
Heading into the first
three months of 2021, the report said a majority of the respondents at 63 per
cent were expected to sustain their domestic selling prices while 27 per cent
projected a rise in selling prices.
“Likewise, in the current
quarter, 10 per cent of the respondents from the beverages sector are planning
to reduce its product’s selling price,”it said.
The survey involved a
total of 1,000 business organisation respondents polled nationwide.
Source：Malaymail
