Business Sentiment Among Japanese Firms Declines For Third Consecutive Term

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Increased labour cost is among the factors affecting business sentiment among Japanese companies in Malaysia. (Bernama pic)PETALING JAYA: Business confidence in Malaysia among Japanese companies operating here has declined to its lowest level since the 2008 bankruptcy of investment bank, Lehman Brothers, although improvements are expected in the next period
A survey of 296 companies conducted by the Japanese Chamber of Trade and Industry Malaysia (Jactim) from Aug 13 to Oct 25 last year found that the business condition diffusion index recorded a 29.9 point decline
“More respondents replied that the reasons for their pessimism are caused by the US-China trade conflict, a stagnation of semiconductor market conditions and increased labour cost,” said Daiji Kojima, chairman of Jactim’s management affair committee
He said more of its members had blamed the trade conflict between US and China as factors that could impact doing business here, with 35.29% of firms saying so compared to 27.86% in the first half of 2019
A total of 49.14% of respondents said Malaysia’s economy was an impacting factor, a decline from 54.26% in the first half of last year
Kojima said some improvements could be expected in the next period
He said the electrical and electronics sector has particularly suffered the most due to the US-China trade friction, although it is expected to recover in the next few months
Japan External Trade Organisation (JETRO) managing director Mai Onozawa said the semiconductor market is expected to improve in the first half of 2020, which would help it make a recovery
The supply and demand judgment diffusion index recorded its lowest level since 2013 at 33.1, although Kojima said those surveyed were also expecting the situation to pick up with an increase in demand
“We will observe this closely,” he added
The study also found that staff levels hit a surplus for the first time since 2008, although Kojima stressed that this was not across the board as there were still some firms experiencing shortages at some levels
He said this was the first time that there was a higher surplus than insufficiency, while Onozawa said this excess was particularly prevalent in the electrical and electronics, machinery and steel industries
“On the contrary, non-manufacturing sectors say they are insufficient,” she said
Onozawa added that these figures do not take into account the impact of the novel coronavirus, as the survey was conducted prior to the outbreak in China. - FMT

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