Business outlook for Malaysian firms remain optimistic in Q4 2019
Business sentiment among Malaysia companies have continued to rise moderately in Q4 2019. According to Dun & Bradstreet (D&B) Malaysia’s Business Optimism Index (BOI) study, BOI rose by 2.36 percentage points from +7.22 percentage points in Q3 2019 to +9.58 percentage points in Q4 2019. On a year-on-year (y-o-y) basis, BOI fell by 3.41 percentage points from +12.99 percentage points in Q4 2018 to +9.58 percentage points in Q4 2019.

The six business indicators under the quarterly BOI study include volume of sales, net profits, selling price, inventory level, employees and new orders. This is the 27 th D&B BOI study being released in Malaysia.

2 of six indicators have climbed upwards on a quarter-on-quarter (q-o-q) basis for Q4 2019. ❖ Volume of sales has increased visibly from +2.50 percentage points in Q3 2019 to +23.33 percentage points in Q4 2019.
❖ Net profit rebounded into positive territory from -5.0 percentage points in Q3 2019 to +9.17 percentage points in Q4 2019.
❖ Selling price moderated strongly from +9.17 percentage points in Q3 2019 to +0.83 percentage points in Q4 2019.
❖ New orders moderated slightly from +25.83 percentage points in Q3 2019 to +21.67 percentage points in Q4 2019.
❖ Inventory levels plunged into the contractionary zone from +5.00 percentage points in Q3 2019 to -1.67 percentage points in Q4 2019.
❖ Employment levels fell from +5.83 percentage points in Q3 2019 to +4.17 percentage points in Q4 2019.

On a year-on-year (y-o-y) basis, 1 of six indicators has increased for Q4 2019.
❖ Volume of sales moderated downwards slightly from +25.98 percentage points in Q4 2018 to +23.33 percentage points in Q4 2019.
❖ Net profits fell moderately from +15.69 percentage points in Q4 2018 to +9.17 percentage points in Q4 2019.
❖ Selling price plunged from +7.35 percentage points in Q4 2018 to +0.83 percentage points in Q4 2019.
❖ New orders climbed from +17.16 percentage points in Q4 2018 to +21.67 percentage points in Q4 2019.
❖ Inventory levels plunged from +1.96 percentage points in Q4 2018 to -1.67 percentage points in Q4 2019.
❖ Employment levels dropped from +9.8 percentage points in Q4 2018 to +4.17 percentage points in Q4 2019.

Sectoral Outlook
For Q4 2019, the agriculture, services and transportation sectors have remained upbeat about the outlook while the wholesale trade sector is most downbeat.

Services
The services sector has emerged as one of the most optimistic sectors with 5 indicators in the positive zone. However, majority of the indicators have moderated downwards.
❖ Volume of sales increased from +3.17 percentage points in Q3 2019 to +34.55 percentage points in Q4 2019.
❖ Net profit rebounded from -9.52 percentage points in Q3 2019 to +27.27 percentage points in Q4 2019.
❖ Selling price fell from +1.59 percentage points in Q3 2019 to +1.18 percentage points in Q4 2019.
❖ Inventory levels dropped from +3.17 percentage points in Q3 2019 to -3.64 percentage points in Q4 2019.
❖ Employment levels moderated from +9.52 percentage points in Q3 2019 to +5.45 percentage points in Q4 2019.
❖ New orders decreased from +39.68 percentage points in Q3 2019 to +31.11 percentage points in Q4 2019.

Agriculture
The agriculture sector is also optimistic with 5 indicators in the expansionary zone. 5 of six indicators have risen in Q4 2019.
❖ Volume of sales increased from +14.29 percentage points in Q3 2019 to +66.67 percentage points in Q4 2019.
❖ Selling price and inventory levels rose from +14.29 percentage points in Q3 2019 to +16.67 percentage points in Q4 2019.
❖ Net profits moderated downwards from +14.29 percentage points in Q3 2019 to 0 percentage point in Q4 2019.
❖ Employment levels and new orders rose from 0 percentage point in Q3 2019 to +16.67 percentage points and +50.0 percentage points respectively in Q4 2019.

Transportation
The transportation sector is also relatively optimistic with 4 indicators in the positive zone for Q4 2019. 3 of six indicators have increased upwards.
❖ Volume of sales, net profit and new orders each increased from 0 percentage point in Q3 2019 to +40.0 percentage points in Q4 2019.
❖ Selling price and employment levels remained unchanged at 0 percentage point in Q4 2019.
❖ Inventory levels moderated downwards from +33.33 percentage points in Q3 2019 to +20.0 percentage points in Q4 2019.

Wholesale
The wholesale sector is least optimistic with 5 of six indicators in the negative zone.
❖ Net profits fell from -18.18 percentage points in Q3 2019 to -31.25 percentage points in Q4 2019.
❖ Employment levels rebounded from -18.18 percentage points in Q3 2019 to -12.50 percentage points in Q4 2019.
❖ Both selling price and inventory each plunged into the negative zone from +18.18 percentage points in Q3 2019 to -18.75 percentage points in Q4 2019.
❖ Volume of sales fell from 0 percentage point in Q3 2019 to -6.25 percentage points in Q4 2019.
❖ New orders moderated downwards from +9.09 percentage points in Q3 2019 to +6.25 percentage points in Q4 2019.

The D&B Business Optimism Index (BOI) is a measure of business confidence in the economy. Released quarterly, it is based on a business sentiment survey that is designed to capture business expectations and is one of the most effective ways to track how the business community perceives the business environment, and where they think it is moving. This is commonly used, worldwide, to assist in analyzing major trends and issues concerning the business community through tracking business parameters including net profits, selling prices, new orders, inventory levels, and employee count.

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