In the second quarter of 2024, Malaysian businesses showcased a generally positive outlook, as indicated by the RAM-CTOS Business Confidence Index (BCI) survey. Recent data from RAM Holdings Bhd and CTOS Digital Bhd revealed a BCI of 54, a slight increase from 53.4 in the same quarter last year, marking the second consecutive quarter above the neutral threshold of 50.
Corporate confidence rose to 59.3 in Q2 2024, up from 57.1 in the previous quarter, reflecting strong optimism among larger companies. Small and medium enterprises (SMEs) maintained an optimistic outlook at 52.6, though this was a slight dip from the 53 recorded in Q1.
Survey respondents showed increased confidence in their business performance for Q2 2024, with both sales and profitability sub-indices demonstrating quarter-on-quarter improvements. Sales rose by 2.1 points to 56.4, and profitability increased by 1.5 points to 50.5.
Despite this optimism, concerns about profitability persisted, with the index barely exceeding the neutral mark of 50, largely due to ongoing cost pressures. The survey, conducted from May 27 to June 18, involved 109 participants, nearly 80% of whom identified rising business costs as their primary challenge, a decrease from 90% in the previous quarter.
Future prospects appeared promising despite these challenges. The retargeting of diesel subsidies had a negligible effect on overall business sentiment. Responses before and after the policy change indicated a slight improvement in sentiment for larger corporations, contrasted with a minor decline for SMEs.
Looking ahead, the upcoming phase-out of blanket RON95 subsidies posed a concern, with two-thirds of firms anticipating increased costs for their products or services due to RON95’s significant role in their operational expenses.
Additionally, the Progressive Wage Policy (PWP) emerged as a critical issue, with 61% of businesses expressing worries over higher labor costs. Despite concerns about compliance and productivity standards, many foresee benefits from the PWP, such as improved employee morale, talent retention, and enhanced productivity.
RAM Holdings group CEO and ED Chris WK Lee highlighted the need for wider adoption and better communication of the PWP’s advantages, emphasizing its potential to transform Malaysia’s wage system. He stressed that broader implementation is essential to maximize its national benefits.
| GDP (nominal) | Capital | Head of State | Head of Government | GDP (nominal) per capita | GDP (PPP) | GDP (PPP) | GDP (PPP) per capita |
|---|---|---|---|---|---|---|---|
| Malaysia | Kuala Lumpur | Sultan Ibrahim ibni Sultan Iskandar | Anwar Ibrahim | 430.895 | 13.034 | 1.225.927 | 37.083 |
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