MIER: Consumer sentiment and business conditions remain on downtrend in 2Q2023
KUALA LUMPUR (Aug 10): The quarterly consumer sentiments index (CSI) tracked by the Malaysian Institute of Economic Research (MIER) continued its downtrend in the second quarter this year (2Q2023), decreasing 8.4 points quarter on quarter (q-o-q) to 90.8 points, below the threshold of 100 points which indicates optimism.
On a year-on-year (y-o-y) basis, however, the CSI rose by 4.8 points.
In its report, the think tank said consumers displayed greater pessimism towards this year’s economic environment, reflected by their negative outlook on future finances, incomes, jobs and inflation levels.
The negative trend is similarly observed in the employment index. It declined 7.4 points q-o-q to 102.4 points from 1Q2023 and 7.8 points y-o-y from 2Q2022.
According to MIER, as respondents exhibited pessimism about future jobs, incomes and inflation, their spending plans also appear to be lower.
As the global economy has not shown signs of recovering soon, MIER is calling for the government to consider measures that would instill greater confidence in jobs and income growth among Malaysians.
A total of 1,014 households were interviewed for the MIER’s CSI survey.
Business conditions index at two-year low
Similarly, the business conditions index (BCI) for 2Q2023 indicated that the private sector is pessimistic over business conditions in the near term. This was reflected in negative indicators in sales, employment and inventory levels, among others.
“This may indicate that firms feel the ongoing global uncertainties will continue to negatively impact their business in the near term,” said MIER.
The quarterly index showed a decrease of 13 points q-o-q from 1Q2023 to 82.4 points — the lowest since 2Q2020. On a yearly basis, the BCI dropped 13.8 points from 96.2 points in 2Q2022.
Meanwhile, companies appear to harbour pessimism regarding business conditions. The BCI expected index for 2Q2023 decreased to 94.3 points from 115.8 points in the previous quarter.
MIER added that the ongoing global uncertainties coupled with elevated inflation and supply chain disruption has placed Malaysia in a vulnerable position.
“It is important that Malaysia, as a small and open trading economy, figure out solutions to address these concerns.”
The survey for MIER's BCI covers a sample of over 350 manufacturing businesses incorporated locally and foreign manufacturing firms operating in Malaysia, MIER's website shows.
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