Businesses More Cautious Entering First Quarter 2021 Dosm
Businesses are more cautious about their prospects in the first quarter of 2021 (Q1 2021), in view of the spike in the new Covid-19 cases which led to the reimposition of the movement control order (MCO) in all states except Sarawak.
This was revealed in the Department of Statistics Malaysia’s (DOSM) Business Tendency Survey, which measures expectations on business performance for the upcoming quarter and six months ahead.
In a statement today, chief statistician Mohd Uzir Mahidin said the survey had covered businesses in four sectors; namely industry, services, wholesale and retail trade, as well as construction.
“The industry sector is a key sector which showed recovery, although the sentiment remains pessimistic with a confidence indicator of -4.4 percent in Q1 2021, compared with -7.5 percent in Q4 2020.
“The improvement in the confidence indicator is due to better expectations in the agriculture and mining subsectors, with confidence indicators of -6.4 percent and -24.7 percent, respectively - against -24.1 percent and -40.9 percent, respectively in the last quarter, ” he said.
Mohd Uzir (above) said one of the factors that contributed to the improved sentiment in the agriculture subsector is the positive expectation on the crude palm oil price, which is projected to rise this year.
Conversely, the business confidence indicators in the services, wholesale and retail trade, as well as the construction sectors remained low.
“Services and wholesale and retail trade sectors posted confidence indicators of -15.0 percent and -11.8 percent, respectively, while (the sentiment) in the construction sector remains unfavourable with the confidence indicator at -51.2 percent in this quarter as against -39.1 percent in the previous quarter,” he added.
On gross revenue, the survey revealed that 25.5 percent of respondents expect their gross revenue to increase in Q1 2021, while 36.5 percent predict a reduction.
“Concurrently, 75.9 percent of establishments expect their number of workforce to remain, while 8.4 percent of establishments intend to expand their workforce and 15.7 percent expect to reduce their workforce in the Q1 2021,” it added.
According to DOSM, the survey also revealed a moderation in expectations on business prospects for the first half of 2021, but noted that the industry sector remains optimistic about its business performance with a net balance of +4.3 percent for January-June 2021.
“The construction and wholesale and retail trade sectors also foresee better business outlook despite remaining in negative territory for the upcoming six months, with a net balance of -34.6 percent and -7.7 percent, respectively, compared with -50.0 percent and -29.3 percent between October 2020 and March 2021.
“The services sector also anticipates a challenging business performance in the next six months, with a net balance of -11.7 percent compared with -9.1 percent for the period of October 2020 till March 2021,” it said.
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