Wednesday, April 19, 2017

Business Confidence Highest In More Than Two Years

Economic Research
19 April 2017

Economic Update

The MIER’s business conditions index (BCI) surged by 31.5pts to 112.7 in 1Q17, from 81.2 in 4Q16 and compared with 83.9 in 3Q16. Going forward, we expect private investment growth to hold up, with a growth of 4.6% in 2017, from +4.4% in 2016, underpinned by:
1.   Ongoing construction of infrastructure projects;
2.   Rising import of capital goods on the back of stronger trade activities.
However, this would partly be offset by the rising cost of doing business due to the weak currency, amid a still challenging business environment.
In the same vein, the Malaysian Institute of Economic Research’s (MIER) consumer sentiment index (CSI) rose by 6.8pts to 76.6 in 1Q17, after dropping 3.8pts to 69.8 in 4Q16, amid an improved outlook on financial expectations and employment.
We expect consumer spending to sustain at 5.7% in 2017, from +6.1% in 2016, on the back of earlier government measures to boost private consumption expenditure.

Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
Economist:  Aris Nazman Maslan  | +603 9280 2184

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