The latest Malaysian Institute of Economic Research (MIER) survey has found that the Business Confidence index showed a huge 31.5 points jump from 81.2 points in Q4 2016 to 112.7 points for Q1 2017 – well into positive territory.
This means that both domestic and external demand is growing. There is also a higher expected production and expected export sales
The Business Expectation sub-Index saw an even bigger jump of a staggering 57.5 points! This may be due to the expected growth in manufacturing production and export sales in the second quarter of 2017 in view of the recovery in exports.
Based on the survey, 43% of respondents reported strong sales, up from 22% in the previous quarter.
New export orders during the quarter were also higher, with 44% of respondents reporting higher new export orders compared to 15% in the preceding quarter.
The survey also pointed toward dropping inventory levels across the manufacturing sector, indicating that sales growth was outpacing the replacement of stock causing manufactures to ramp up production significantly.
On wages, the survey found that salaries rose rapidly during the first quarter, with 68% of the companies surveyed disclosing that their wage costs per unit had gone up. Respondents of the Consumer Sentiments survey, however, were not as upbeat.
The Mier Consumer Sentiment Index (CSI) stood at 76.6 in the first quarter, gaining 6.8 and 3.7 points quarter on quarter and year on year respectively.
Typically, consumer confidence would lag business confidence as the businesses would be the first ones to find out if the economy has improved as they have immediate access to hard data – especially in orders.
Bonuses and wage increases for employees comes later but some workers are already benefiting due to the increased overtime and incentive pays from the stretched production lines that has been ramped up.
Consumer confidence is also easily influenced by negative propaganda by the opposition, which aims to sabotage our economy by purposely depressing confidence. However, consumer confidence will eventually follow business confidence and should spike up even more in the next few months.
This would mean that Pakatan’s propaganda of “failed state”, bankrap and “Save Malaysia” will fail and they will be exposed as the liars they are.
Those who still believes will mostly be the hard-core RBAs and opposition party members.
Such negative and fear-inciting propaganda may have some traction in late 2015 and 2016 but will fail spectacularly this year.
After all, why rock the boat when things are good and you can see big improvements?