KUALA LUMPUR: Optimism among Malaysian medium to large enterprises (MLEs) has slumped drastically in the last 12 months, according to the Grant Thornton International Business Report.
SJ Grant Thornton managing partner Datuk N.K. Jasani said the Malaysian businesses optimism balance fell from +38% to +2% during that period.
A balance figure refers to the percentage of survey respondents who are optimistic less the percentage of those who are pessimistic.
“The drop in optimism in Malaysia was due to the slump in the stock markets, poor performances of major corporations and drastic drops in exports and prices of raw materials,” he told StarBiz.
“The gloom is expected to last for the next six to 12 months based on the outlook for Malaysian exports and prices of raw materials.”
He said the slide in demand was the greatest concern for the Malaysian business owners, followed by the shortage of consumer credit.
“The consumer demand has fallen because of the reduced disposable income of Malaysian consumers,” he said, adding that some people lost their jobs or were being paid lower amounts.
He said business credit had also became tighter for most business owners and particularly the MLEs due to banks taking a more precautionary stance in lending.
Meanwhile, optimism among MLEs around the world has slumped by 56% in the last 12 months, pushing the Grant Thornton International optimism/pessimism barometer to a record negative balance of -16% compared to +40% a year ago.
The most optimistic country in Asia is India with +83%, followed by the Philippines (+65%) and Vietnam (+31%) (see table).
Hong Kong suffered the biggest swing, going from +81% optimistic last year to -49%. The Japanese are the least optimistic business owners (-85%). The US has an optimism/pessimism balance of -34%.
The business report done by Grant Thornton International Ltd provides insights into the views and expectations of senior executives of over 7,200 MLEs across 36 economies.
Jasani said the polarised results of the survey suggested that there were still pockets of hope in the global marketplace.
RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said the drop in Malaysian business optimism was expected, given the contagion effect from the uncertainties over the depth of the global downturn.
“In fact, Malaysia’s fundamentals remain relatively strong, supported by the strength of consumer spending,” he said.
He said the consumer confidence level had been affected by the continuous bad news related to the financial crisis as well as the slump in Malaysia’s export figures.
“Consumers have become more cautious in spending and this is expected to last for the next six to nine months,” Yeah said.
He said the measures taken by the Government to spur the economy would help to boost consumer demand.
“Malaysia is in a better position to weather the impact, supported by our good fundamentals. The unemployment situation is also manageable in Malaysia,” he said.
Cheetah Holdings Bhd executive director Chia Kee Kwei said the slump in business optimism in Malaysia was caused by the financial crisis but the success af a company would depend on its strategies.
He said the consumer demand was expected to slow down a bit this year and clearer pictures would appear post-Chinese New Year.
“We are still positive in our sales as our prices are within the affordable range,” Chia said.
He said the company was looking for alternative materials and tried to cut its expenses amid the downturn.
“Malaysia is quite safe from the crisis as our exposure to other countries is not that high,” he said.
