Business sentiment among Malaysian firms moderately optimistic in Q3 2019 Business sentiments among Malaysian companies has rebounded slightly after falling in Q2 2019. According to Dun & Bradstreet (D&B) Malaysia’s Business Optimism Index (BOI) study, BOI inched upwards from +5.61 percentage points in Q2 2019 to +7.22 percentage points in Q3 2019. On a year-on-year (y-o-y) basis, BOI moderated from +13.17 percentage points in Q3 2018 to +7.22 percentage points in Q3 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 26 th D&B BOI study being released in Malaysia. 4 of six indicators has climbed upwards on a quarter-on-quarter (q-o-q) basis for Q3 2019. ❖ Volume of sales has fallen moderately from +6.83 percentage points in Q2 2019 to +2.50 percentage points in Q3 2019. ❖ Net profit has plunged from +1.95 percentage points in Q2 2019 to -5.0 percentage points in Q3 2019. ❖ Selling price increased from +6.83 percentage points in Q2 2019 to +9.17 percentage points in Q3 2019. ❖ New orders jumped from +10.24 percentage points in Q2 2019 to +25.83 percentage points in Q3 2019. ❖ Inventory levels rose from +4.39 percentage points in Q2 2019 to +5.00 percentage points in Q3 2019. ❖ Employment levels climbed from +3.41 percentage points in Q2 2019 to +5.83 percentage points in Q3 2019. On a year-on-year (y-o-y) basis, only 2 of six indicators has increased for Q3 2019 ❖ Volume of sales moderated downwards slightly from +18.0 percentage points in Q2 2019 to +2.50 percentage points in Q3 2019. ❖ Net profits dived into the contractionary zone from +15.50 percentage points in Q2 2019 to -5.0 percentage points in Q3 2019. ❖ Selling price jumped from +1.0 percentage point in Q2 2019 to +9.17 percentage points in Q3 2019. ❖ New orders climbed from +19.50 percentage points in Q2 2019 to +25.83 percentage points in Q3 2019. ❖ Inventory levels fell from +18.0 percentage points in Q2 2019 to +5.0 percentage points in Q3 2019. ❖ Employment levels dropped from +7.0 percentage points in Q2 2019 to +5.83 percentage points in Q3 2019. Sectoral Outlook For Q3 2019, both manufacturing and services sectors are most upbeat about the outlook while the construction and transportation sectors are least optimistic. 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 decreased visibly from +24.72 percentage points in Q2 2019 to +3.17 percentage points in Q3 2019. ❖ Net profit plunged into the contractionary zone from +21.35 percentage points in Q2 2019 to -9.52 percentage points in Q3 2019. ❖ Selling price moderated strongly from +10.11 percentage points in Q2 2019 to +1.59 percentage points in Q3 2019. ❖ Inventory levels slipped from +6.74 percentage points in Q2 2019 to +3.17 percentage points in Q3 2019. ❖ Employment levels dropped from +10.0 percentage points in Q2 2019 to +9.52 percentage points in Q3 2019. ❖ New orders rose from +23.60 percentage points in Q2 2019 to +39.68 percentage points in Q3 2019. Manufacturing The outlook within the manufacturing sector has improved, with 5 indicators in the positive zone for Q3 2019. ❖ Net profit, selling price, new orders and employment levels each rose from -35.90 percentage points, 0 percentage point, -15.39 percentage points and +10.26 percentage points in Q2 2019 respectively to +10.53 percentage points in Q3 2019. Media Statement 09 Jul 2019 – Dun & Bradstreet Malaysia ❖ Volume of sales rebounded visibly from -25.64 percentage points in Q2 2019 to +5.26 percentage points in Q3 2019. ❖ Inventory levels are expected to remain unchanged at 0 percentage point in Q3 2019. Agriculture The agriculture sector is moderately optimistic with 4 indicators in the expansionary zone. 3 of six indicators have risen in Q3 2019. ❖ Volume of sales and net profit each rose from +7.14 percentage points and 0 percentage point to +14.29 percentage points in Q3 2019. ❖ Selling price moderated from +28.57 percentage points +14.29 percentage points in Q3 2019. ❖ Employment levels rebounded from the negative zone, up from -7.14 percentage points in Q2 2019 to 0 percentage point in Q3 2019. ❖ New orders moderated downwards from +28.57 percentage points in Q2 2019 to 0 percentage point in Q3 2019. ❖ Inventory levels decreased from +28.57 percentage points in Q2 2019 to +14.29 percentage points in Q3 2019. Wholesale The wholesale sector is slightly more upbeat compared to the previous quarter, with 3 indicators in the positive zone. ❖ Selling price, new orders and inventory levels each rebounded from the contractionary zone. ❖ Selling price rose from -6.67 percentage points in Q2 2019 to +18.18 percentage points in Q3 2019. ❖ New orders jumped from -33.33 percentage points in Q2 2019 to +9.09 percentage points in Q3 2019. ❖ Inventory levels rebounded from -6.67 percentage points in Q2 2019 to +18.18 percentage points in Q3 2019. ❖ Net profits and employment levels remained contractionary. ❖ Net profits increased from -26.67 percentage points in Q2 2019 to -18.18 percentage points in Q3 2019. ❖ Employment levels inched up from -20.0 percentage points in Q2 2019 to -18.18 percentage points in Q3 2019. ❖ Volume of sales climbed from -26.67 percentage points in Q2 2019 to 0 percentage point in Q3 2019. Construction The construction sector is one of the least optimistic with 2 indicators in the negative zone for Q3 2019. 4 of six indicators have moderated upwards. ❖ Both volume of sales and employment levels each increased from -28.57 percentage points and -14.29 percentage points in Q2 2019 to 0 percentage point in Q3 2019. ❖ Net profits and inventory levels remained contractionary. Net profits increased from -28.57 percentage points in Q2 2019 to -25.0 percentage points in Q3 2019 while inventory levels fell from -14.29 percentage points in Q2 2019 to -25.0 percentage points in Q3 2019. ❖ Selling price rebounded into the positive zone, up from -14.29 percentage points in Q2 2019 to +25.0 percentage points in Q3 2019. ❖ New orders fell from +14.29 percentage points in Q2 2019 to 0 percentage point in Q3 2019. Transportation The transportation sector is also one of the least optimistic with 1 indicator in the positive zone for Q3 2019. 4 of six indicators have moderated downwards. ❖ Volume of sales and net profit each fell from +33.33 percentage points in Q2 2019 to 0 percentage point in Q3 2019. ❖ Selling price and new orders each dropped from +16.67 percentage points in Q2 2019 to 0 percentage point in Q3 2019. ❖ Employment levels remain unchanged at 0 percentage point. ❖ Inventory levels increased from +16.67 percentage points in Q2 2019 to +33.33 percentage points in Q3 2019.

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