Business performance is expected to slow down in 4Q 2015 as reflected in the -0.8% drop in the confidence indicator as compared to +2.2% gain in 3Q 2015, according to the Statistics Department.
Confidence indicator is an indicator that summaries the overall views on short-term business situation in various sectors in Malaysia. The confidence indicator is computed as the average of the net balance for selected variables.
“The business performance by sector shows the industrial and services sectors are expected to grow in 4Q 2015 with confidence indicator of +1.4% and +1.2%, respectively,” the Statistics Department pointed out in a media statement. “However, the business performance of the wholesale & retail trade and construction sectors is expected to drop with confidence indicator of -13.2% and -2.9%, respectively.”
These latest data are part of the Business Tendency Statistics based on the Business Tendency Survey which is conducted quarterly by the Statistics Department. The main objective of this survey is to measure the current business performance in Malaysia as well as expectation for the upcoming three and six months.
This report publishes the statistics of current business situation for 3Q 2015, business expectation for 4Q 2015 and the upcoming six months period of October 2015 to March 2016.
According to the Statistics Department, its forecast for 4Q 2015 shows that 29.5% of establishments expect an increase in gross revenue while another 25.0% foresee a decrease. The remaining 45.5% predict their gross revenue to be unchanged.
“The difference between the percentages of establishments giving favorable and unfavorable response known as the net balance remained positive at +4.5% as compared to +13.9 in the previous quarter,” explained the Statistics Department.
In terms of number of employees, 15.9% of establishments predict an increase while 11.9% of establishments predict a decrease in 4Q 2015. The magnitude of the positive net balance of the number of employees in 4Q 2015 is lower (+4.0%) than the +10.3% posted in 3Q 2015.
Meanwhile, the Statistics Department said the current situation of business performance decreased with the overall net balance for all sectors recorded -7.7% in 3Q 2015 as compared to -3.0% in the previous quarter (2Q 2015).
“A significant majority of establishments (63.9%) reported the current situation of their business to remain the same, 14.2% show improvement in their business climate while another 1.9% of show less favorable conditions,” revealed the Statistics Department.
Moving on, a total of 29.6% of establishments reported an improvement in their business gross revenue. In contrast, another 33.2% have reported deterioration in their gross revenue condition while 37.2% stated that their gross revenue remain the same in 3Q 2015.
“This translates to a net balance of -3.6% as compared to +2.0% in the previous quarter,” highlighted the Statistics Department.
In terms of the number of employees, 17.4% of establishments indicated an increase in employment, another 18.9% reported a decrease while the remaining 63.7% reported no change. Overall, a net balance of -1.4% for the number of employees was recorded in 3Q 2015 compared with +3.8% in 2Q 2015.
At sectoral level, the Statistics Department noted that the current business situation of the wholesale & retail trade, industry and services has deteriorated during 3Q 2015 with a net balance of -22.9%, -8.9% and -0.2%, respectively. In contrast, the construction sector has reported a better net balance of +8.3%.
Looking ahead, the Statistics Department expects business conditions in October 2015 to March 2016 to decline with net balance -0.2%. The sector expected to register a decrease is wholesale & retail trade sector (-27.1%).
“On the other hand, the services and industry sectors are expected to increase with the net balance of +10.8% and +0.8%, respectively,” projected the Statistics Department. “While business performance is expected to remain the same for the construction sector compared to the previous period.”