August 4, 2012
PETALING JAYA (Aug 3, 2012): Malaysia's Business Confidence Index (BCI) for Micro, Small and Medium Enterprises (MSME) has dropped from 62.7 points in the quarter to 59.5 points in the second quarter of the year.
Hong Kong based market research agency, Radar Global, said the quarter two results revealed a slight decline of BCI in India, Malaysia, China and Thailand.
Radar conducted a first of its kind quarterly sentiment index of business confidence, economic outlook and bank reputations amongst MSMEs in seven emerging markets, namely China, Egypt, India, Malaysia, Philippines, Thailand and the UAE.
It recorded a slight increase in the BCI of the Philippines, UAE and Egypt.
Nevertheless Radar concludes that the 'Net Outlook' is still very positive in all countries.
"Net Outlook is calculated as the percentage of positive responses minus the percentage of negative responses.
"Despite a slight decline in overall business confidence levels, most respondents still believe their country's economy is improving," said Radar Global co-founder and director Grant Beuzeval in a statement recently.
The findings also showed that although 90% of respondents were positive about their own company's financial prospects, only 36% were positive about the country's economy over the next 12 months.
As for Malaysia, new businesses (less than 5 years) are the most optimistic about the economy and the oldest companies (above 31 years) are the least optimistic.
"The most optimistic sectors for continued improvement in the country's economy are Construction (45%), Transport (42%), while 23% of the Trade sector (wholesale and retail) expect a slowdown.
"About 40% of companies expect their work force (head count) to increase over the coming 12 months, with 55% expecting it to remain about the same. Only 5% expect a shrinkage," said Beuzeval.
Some of the highlights of the BCI include:
> 78% are optimistic about launching new products and/or services in the coming 12 months.
> 52% expect to seek financing in the coming 12 months.
> 85% are positive about their own industry's prospects.
Radar found that the three main barriers to local business were Corruption (46%), Red Tape (39%) and Shortage of Labour (33%).
Beuzeval said although overall the momentum in the seven markets appear to be improving amongst government bodies and financial institutions to support, nurture and sustain MSMEs, these measures are being implemented too slowly for business owners.
"MSME's are the lifeblood of the local and global economy - they're hotbeds of innovation, competition, growth and risk-taking, but they end up taking all the risks by themselves.
"Radar Global believes it's important to measure and monitor the business confidence of MSME's, so we created the Greenhouse250 Index, which we hope will be synonymous with business confidence in emerging markets," he said.