Malaysian business sentiment improves slightly but stays downbeat for 3Q20 — Dun & Bradstreet

KUALA LUMPUR (June 29): Business sentiment among Malaysian companies has improved slightly despite remaining in the contractionary zone for the third quarter of 2020 (3Q20), according to Dun & Bradstreet (D&B) Malaysia's Business Optimism Index (BOI) study.

The study released today said BOI rose to -13.33 percentage points, from -21.86 percentage points in 2Q20.

On a year-on-year basis, BOI fell to -13.33 percentage points for 3Q20, from +7.22 percentage points for 3Q19.

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

The study showed the volume of sales increased slightly from -27.84 percentage points for 2Q20 to -19.2 percentage points for 3Q20.

It said the selling prices inched up to -7.2 percentage points in 3Q20 from -10.31 percentage points previously.

Meanwhile, inventory levels rose from -20.62 percentage points for 2Q20 to -8.8 percentage points for 3Q20, while employment levels jumped to -10.4 percentage points from -5.21 percentage points previously.

It added that net profit jumped from -40.2 percentage points for 2Q20 to -22.4 percentage points for 3Q20, while new orders rose to -12 percentage points from -26.8 percentage points for 2Q20.

Looking ahead, D&B said for 3Q20 the financial and mining sectors are the most upbeat while the services, manufacturing and wholesale sectors are the most pessimistic.

Dun & Bradstreet (Malaysia) Sdn Bhd chief executive officer Audrey Chia said she is expecting sentiment to improve slightly in the months ahead with the gradual resumption of economic activities and interstate travels.

"The government's fiscal and monetary stimulus packages will help stimulate economic growth, with some expected recovery towards the end of the second half of 2020.

"However, growth across the majority of sectors is expected to remain muted, with continued contractions seen in services, wholesale trade and manufacturing," said Chia.

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