KUALA LUMPUR, June 28 (Xinhua) -- Malaysian firms turn upbeat on their business outlook as more firms anticipate the cost of doing business to improve following the country's historical regime change, a Malaysian survey showed Thursday.
RAM Business Confidence Index (RAM BCI) readings that covered close to 3,500 small and medium enterprises (SMEs) and corporates showed that Malaysian firms remain upbeat about their business outlook going into the third and fourth quarters of 2018. Its corporate and SME indices again charted positive sentiment at 56.8 and 52.1 respectively, with continued improvement in their turnover and profitability sub-indices.
"The sustained positive readings indicated Malaysia's economic resilience in the first half is likely to carry through to the second half of the year, supported in particular by the corporate segment's firm optimism," it said.
The results of the survey also showed that the outcome of the 14th General Election (GE14), in which former prime minister Najib Razak's Barisan Nasional coalition lost to Pakatan Harapan led by Mahathir Mohamad, may have partly contributed to the more upbeat sentiment among firms.
The better business sentiment post-GE14 is observable across all sectors for both Corporates and SMEs, except for the corporate construction sector, which shaved off 1 point.
"The uncertainties over various property and infrastructure projects following the election victory of Pakatan Harapan may have slightly dampened the prospects of incoming contracts for corporate construction firms, as depicted by its lower turnover sub-index for the post-GE14 sample. That said, corporate construction firms remained firmly optimistic post-GE14, with an overall index value of 55.0, indicating still bullish prospects for the rest of the year," it said.
Meanwhile, the proportion of firms citing "rising cost of doing business" as their main challenge was also much lower after GE14, likely on expectations that the zero-rating of goods and services tax (GST) and the three-month tax holiday until the sales and services tax (SST) is reintroduced in September will allow businesses to achieve some cost savings.
Among the firms surveyed after GE14, only 22.3 percent of corporates and 17.1 percent of SMEs cited "rising cost of doing business" as their primary challenge, as opposed to a respective 32.2 percent and 22.1 percent before GE14.
"Moving forward, short-term economic uncertainties remain," it said, citing the review of major government-linked projects and the proposed increase in minimum wages on the domestic front and trade war concerns on the global front.