The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) has conducted its half-yearly ACCCIM Malaysia’s Business and Economic Conditions Survey (M-BECS), covering 1H 2021 and 2H 2021F for the period 1 June to 15 July 2021.

The survey has received a total of 693 respondents from a broad segment of industries: Services (60.9%), Manufacturing (22.7%), Construction (9.8%), Agriculture (5.2%) and Mining (1.4%). SMEs make up 91.8% of total respondents.

The last 18 months have been a tumultuous period for the Malaysian economy and business community. The prolonged pandemic and “open and shut” strict containment measures have made people and businesses battle weary, pandemic fatigue and despair as the deep economic scarring effects continued to disrupt the recovery and survival of many economic sectors and industries, especially micro enterprises and SMEs.

THE FINDINGS OF ACCCIM M-BECS (JAN-JUN 2021 AND JUL-DEC 2021F)
(i) Overview
The survey results show that most businesses continue struggling to cope with a long-drawn pandemic impact. Their production and operation activities have been limited, cutbacks in demand and they are facing poor cash flow, credit and debtors’ conditions.
46.2% of respondents have experienced a very tight cash flow problem and unable to cover business operations/production, raw materials/inventory, manpower cost for 3 months. More than half of micro-enterprises (50.3%) do not have sufficient cash flow to pay their operating expenses for 3 months.

Sales were badly hit with 63.8% of respondents’ business sales were still markedly below pre-pandemic level. Of the total, 30.7% having sales more than 30% below pre-pandemic level; 13.4% of businesses’ sales were more than 50% below pre-pandemic level; particularly the tourism-related sectors, construction sector and professional and business services sector.

(ii) Key Highlights
(a) While businesses are pinning high hopes on a smooth transition towards a safe reopening of the economy under the National Recovery Plan (NRP), backed by the acceleration of national vaccination program, most businesses take a very cautious view of the economy and business conditions in 2H 2021.

(b) 64.5% of respondents foresee economic conditions will be worse off in 2H 2021 compared to 1H 2021. Overall, 65.1% of respondents have no confidence of an economic recovery in 2021.

(c) 58.0% of respondents revealed that their business has worsened in 1H 2021 due to weak consumer demand amid the supply chain disruptions. A higher 62.5% of respondents expect worse business conditions in 2H 2021.

(d) Overall, businesses are still struggling to recover in 2021 due to the prolonged containment measures and restricted mobility that have disrupted supply chains and cutbacks in demand.

(e) A higher percentage of respondents foresee worsening business conditions in 2021: Construction (70.6%), tourism-related sector (62.2%), wholesale and retail trade (61.5%) and ICT (56.7%). Almost all non-essential and social activities are not allowed to operate while most permitted operating essential/economic sectors are given limited manpower capacity amid the supply chain disruptions.

(f) Amid the anticipated reaching of herd immunity vaccination, businesses have cautious views about economic and business conditions as well as prospects in 2022. 54.1% of respondents hold a neutral view of economic conditions and 53.1% on business prospects in 2022.

(g) 31.2% of respondents foresee worsening business conditions in 1H 2022. It takes some time for the deep economic scarring effects to wear off. Some businesses would require a longer time to recoup the revenue loss and mend their operation losses. Market remains wary about the efficacy of vaccines protection against new virus variants that are more virulent and highly contagious.

In this survey, we have also looked into two issues: (i) Business digital transformation plan; and (ii) Regional Comprehensive Economic Partnership (RCEP). We have proposed a number of proposals to facilitate the adoption of digitalisation and automation as well as to facilitate our businesses to grab the opportunities in RCEP while coping with the competition.

Against the above cautious assessment of the state of economy and business environment, ACCCIM hopes that the Government, relevant Ministries and agencies would coordinate and synchronise their efforts in ensuring the effective implementation and fast transition towards a safe reopening of the economy under the National Recovery Plan. This also requires a whole-of-society approach, including close engagement with the industry stakeholders.

ACCCIM together with other industry stakeholders have put forward a comprehensive list of practical health safety reopening proposals to YAB Prime Minister and YB Minister of Finance. This is to ensure business operations continuity while not compromising our community health and workplace safety. Amongst these include:
(a) To reopen all non-essential sectors either under Phase 1 or Phase 2 with at least 50% manpower capacity, subject to strict SOP;
(b) To remove a blurred distinction between essential and non-essential as all businesses are deeply interconnected in the supply chains (inputs and services) in one way or another;
(c) No blanket limitation of manpower capacity, pegging to level of vaccinated employees and the workplace layout;
(d) No blanket implementation of EMCO and strict containment measures on the entire area/district/state. Only closed specific companies that have been detected with high cases of infection; and
(e) Making use of vaccination pass (two doses) as the basis for adjusting social distancing measures under Phase 3 and 4 of NRP, such as dined-in, restaurants, entertainment hub, as well as inter-district-state travel.

Snapshots of ACCCIM M-BECS 1H 2021 and 2H 2021F

Note: Numbers may not add up to 100.0% due to rounding.

ACCCIM MBECS 2021H1 and 2021H2 Full Report
ACCCIM MBECS 2021H1 and 2021H2 PPT