ACCCIM Survey Reports


The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM)’s Malaysia’s Business and Economic Conditions Survey (M-BECS) was conducted from 16 November 2020 to 15 February 2021, covering the second half-year of 2020 (Jul-Dec 2020) and expectations for the first half-year of 2021 (Jan-Jun 2021), has received 696 responses.

It has been more than a year that businesses have been confronted with continued scarring effects of the COVID-19 pandemic amid the embarking on national immunisation program starting in late February this year.  We are now entering this year of cautious optimism that is both still reeling from the COVID-19 pandemic and yet offers a sense of hope and purpose.

The M-BECS results revealed that most businesses are still reeling from the prolonged impact of the pandemic in 2H 2020, with disproportional impact between economic sectors and size of business operations. Businesses continued to tread cautiously about economic and business prospects in 2021. The tourism-related sectors were hit the hardest in 2H 2020 and 2020. Their business prospects are expected to remain weak in 2021 amid the on-going vaccination program. More than 50% of respondents in the tourism-related sectors would be unlikely to survive if the CMCO or EMCO is in place for more than 1-2 months.

Most businesses remain wary about economic and conditions in 1H 2021 due to lingering scarring effects of the third wave of the COVID-19 and movement restrictions on activities since late 3Q 2020. While the movement restrictions are less restrictive, it is expected that the scarring effects to continue in 1Q 2021, in particular for the travel and tourism-related sectors.

Summary of Key Findings of M-BECS

a) Overall, 44.0% of total respondents have experienced worse business conditions in 2H 2020 though the percentage share reduced by 34.2 percentage points from 78.2% in 1H 2020. 26.9% of respondents experienced better business conditions in 2H 2020.

b) While it is reckoned that the accelerated vaccination holds the key for economic recovery, the survey results revealed that businesses tread cautiously about economic prospects in 202153.4% of respondents having a ”Neutral” economic outlook in 2021 (“Better”: 20.6%; “Worse”: 26.0%).

c) Comparing between 1H 2021 and 2H 2021, businesses’ expectations are feeling better in 2H, probably hopeful on a higher share of population to be vaccinated20.3% of respondents anticipate better economic prospects in 2H 2021 compared to only 9.5% for 1H 2021 while 20.9% of respondents expect worse economic outlook in 2H 2021, which was lower than that of 36.1% in 1H 2021.

d) Businesses are more optimistic about business and economic prospects in 2022 as the economic recovery is expected to gain a full traction and a wider coverage of vaccination. A large number of respondents (60.2%) in medium enterprises and large enterprises (53.6%) forecast better economic prospects in 2022, followed by small enterprises (41.2%) and micro enterprises (39.8%).

e) Top five factors that have impacted the performance of businesses in 2H 2020 are: (i) Higher operating costs and cash flow problem (as ranked by 48.3% of total respondents); (ii) Declining business and consumer sentiment (47.6%); (iii) Political climate (46.1%); (iv) Lower domestic demand (41.2%); and (v) Unclear communication, inconsistent interpretation and the enforcement of SOP (39.8%).

f) 3Cs (Cost, Credit, Cash flow) were rated by 74.4% respondents as their top concern under the prolonged impact of the pandemic, which has caused different magnitude of demand retrenchment and supply disruptions as well as movement restrictions. 48.3% of respondents indicated that high operating costs and cash flow problem had dampened their business performance in 2H 2020.  7% of respondents indicated that their current cash flow level is unable to cover business operations/productions, raw materials/inventory and manpower for more than six months.

g) Despite more than 50% of respondents indicated that they have either maintained (43.1%) or reduced (14.2%) their capital expenditure in 2H 2020, a higher percentage share of respondents (42.7% vs. 31.6% projected in previous survey) has increased their capital expenditure in 2H 2020.

Toward this end, ACCCIM hopes that Government at all levels (Federal, state and local authority) will continue to facilitate the economy recovery and business sustainability. Businesses need meaningful not piecemeal plans.

As soon as economic and business activities have returned to normalcy, our political leaders must play an active part in shaping a vision for the economy and investment so that businesses can once again have the confidence to invest now and for the future.

As there remain challenges amid the on-going vaccination program, businesses should not be overburdened with regulatory compliance under the healing process. Hence, ACCCIM sees the need of continued credit and loans facilities; easing of burdensome regulatory and compliance costs; and the enhanced provision of tax incentives, such as Reinvestment Allowance, Accelerated Capital Allowance and Market Development Grant.

ACCCIM values regular engagement and working with government at all levels to sustain the economy on a sustainable positive trajectory.

The elements of a clear and well-defined national development path, quality digital infrastructure development, conducive regulatory environment, competitive cost of doing business, human capital optimisation, small and medium-sized enterprise (SME) prioritisation, smart financing and revitalise Domestic Direct Investment (DDI) have always been the hallmarks of ACCCIM’s engagement with government at various levels, particularly the economic and industry clusters.

Executive Summary of Key Findings MBECS 2020(2)-2021_EN


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