The Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) Malaysia’s Business and Economic Conditions Survey (M–BECS) covers Jan–Jun 2022 (1H 2022) and expectations for Jul–Dec 2022 (2H 2022). It was conducted during the period 26 April to 30 June 2022 and has received a total of 860 active responses.

M–BECS: Overview and Summary of Key Findings
1. Malaysia’s economic recovery continues in 1H 2022, albeit unevenly among economic sectors. Underpinning the recovery was the improvement in domestic demand and still buoyant exports.

2. With lingering concerns about both external and domestic headwinds still dominating, a high percentage (70.4%) of total respondents were “Neutral” about economic conditions in 1H 2022; and only 14.7% indicated “Better”. The expectations have improved in 2H 2022 (25.0% of
respondents expect “Better” economic outlook) amid “Neutral” still high at 56.5%.

3. Overall, a majority of respondents (65.0%) are neutral about economic outlook in 2022; 20.5% expect “Better” economic outlook, and 14.5% perceive “Worse” outlook.

4. For 2023, a high percentage of respondents (47.7%) hold a “Neutral” view about economic prospects while 39.8% expect “Better” prospects. Lingering worries about global stagflation, rising recession risks in the US economy and Europe, faster global monetary tightening as well
as domestic issues have dampened business sentiment.

5. 65.0% of respondents have a “Neutral” view about business outlook in 2022, especially in 1H 2022 (67.3% vs. 58.8% in 2H 2022). A higher percentage of respondents (26.1%) expect “Better” business prospects in 2H 2022 vs. 17.2% in 1H 2022. It is encouraging that 69.5% of respondents across most sectors reported that their sales have recovered or even been higher compared to pre–pandemic level (vs. 56.5% surveyed previously).

6. Businesses’ cash flows and debtors’ conditions were largely unchanged in 1H 2022 though a higher percentage of respondents have experienced “Worse” debtors’ condition. Moving into 2H 2022, a majority of them is cautious about business, cash flows and debtors’ conditions.

7. “Increase in prices of raw materials” (61.6%) remained as the top factor that impacted business performance in 1H 2022, followed by “Shortage of workers” (53.8%); “High operating cost and cash flow problem” (43.5%); “The Ringgit’s fluctuation” (40.0%); and “Shortage of raw materials” (32.6%).

8. Business assessment in 1H 2022 and 2H 2022F:
a) Sales performance: 49.8% of respondents have experienced an increase in sales revenue in 1H 2022, thanks to the reopening of economy and international borders. Slightly lower respondents (47.0%) expect better sales revenue in 2H 2022.
b) Business operations: Overall production level has improved in 1H 2022 amid facing the shortage of workers and increased cost of raw materials. Nevertheless, about 74.8% of respondents will either increase or maintain their production in 2H 2022.
c) Cost of raw materials: Substantial increase in prices of domestic (indicated by 84.0% of respondents) and imported raw materials (79.8%) in 1H 2022 will continue, albeit slightly lower in 2H 2022, especially in the manufacturing and construction sectors.
d) Manpower: Most sectors have kept their employment unchanged in 1H 2022 and will likely maintain the level in 2H 2022. Employees’ wages have increased due to higher minimum wages.
e) Capital expenditure: Close to two–thirds of respondents have increased their capital expenditure in 1H 2022. Many companies will continue to invest further in 2H 2022, suggesting a moderate recovery in business sentiments, backed by the continued economic recovery.

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