Muristek
Survey: Full economic recovery uncertain amid optimistic business sentiments
Business sentiments in the first quarter of 2022 was expected to be positive amid the reopening of the country’s economy but full recovery remained uncertain. — Picture by Ahmad Zamzahuri
Follow us on Instagram and subscribe to our Telegram channel for the latest updates.
KUALA LUMPUR, April 4 — Business sentiments in the first quarter of 2022 was expected to be positive amid the reopening of the country’s economy but full recovery remained uncertain, a joint survey has revealed.
According to the RAM Holdings Bhd (RAM) and CTOS Data Systems Sdn Bhd (CTOS) Business Confidence Index (BCI) survey for the first quarter of 2022, the overall index charted a reading of 55.4, which is a positive sentiment, compared to the previous five quarters during the pandemic period in which the readings hovered below 40.
“Surveyed firms were most bullish about sales and hiring outlook, seen in the respective sub-indices rising to 60.2 and 60.7.
“The share of firms citing economic weakness as a significant challenge dropped to 50 per cent from more than 80 per cent in the same period last year,” said a statement by RAM today.
The statement added that findings from CTO’s credit managers concurring with the joint survey indicated an increase of 17 per cent of CTO’s subscribers pulling business credit reports for due diligence was another indicator that businesses were beginning to increase operations and productivity.
However, the statement stated that demands had not fully normalised as the pandemic had unalterably changed consumption habits and persistent capacity slacks are to be expected.
The statement also said that the joint survey, in which 140 respondents participated, found that around 55 per cent of firms have yet to recover to pre-Covid levels, particularly in the business services sector (62 per cent) as well as small and medium enterprises (SMEs) and micro firms (60 per cent).
“Most of these firms foresee full recovery only from 2023 onwards. In contrast, only 12 per cent of respondents, mainly from larger corporate firms, said business has surpassed pre-pandemic levels.
“Large corporates likely benefited from the sharp rebound in export sales last year on the back of robust external demand,” the statement said.
In addition, 62 per cent of surveyed firms cited the rising cost of doing business as one of the main deterrence to full recovery, making it the biggest concern this quarter with higher staffing and raw material input costs particularly felt by manufacturing firms as pain points.
The statement concluded that SMEs and micro-enterprises trailed behind corporates on the path to recovery and while Malaysia’s transition into the endemic phase may boost prospects, firms would have to contend with rising costs and labour shortages that will eat into margins.
“Banks need to keep SMEs adequately funded during the recovery phase. Policymakers should continue to engage with vulnerable firms and address specific needs to ensure a uniform and faster recovery from the pandemic,” said the statement. — Bernama