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Malaysian businesses cautiously optimistic

Dato’ NK Jasani, Country Managing Partner of SJ Grant Thornton said, “This change in levels of business confidence feeds directly into business growth prospects.”

Kuala Lumpur, 7 January 2014: New research from Grant Thornton’s International Business Report (IBR) reveals that businesses in Malaysia are cautiously optimistic about the economic outlook for 2014. Results from the survey carried out in early December 2013, shows that optimism level has risen from 12% last year to 20%, an increase of 8 percentage points.

Dato’ NK Jasani, Country Managing Partner of SJ Grant Thornton said, “This change in levels of business confidence feeds directly into business growth prospects.”

Cautious optimism in Malaysia

In Malaysia, positive business growth prospects can be seen as 52% of business owners expect an increase in revenue this year. Business owners have also revealed that they expect to invest in plant and machinery, 64%, the highest in ASEAN and also invest in new buildings, 28%, and the 2nd highest in ASEAN.

“Apart from the optimistic business environment, the survey also shows that there is positive labour market for the year ahead,” said Dato’ Jasani.

“+42% of businesses are expecting to invest in plant and machinery and +35% are expecting profitability for the year ahead,” he continued.


“Businesses are more confident in employment this year than the same period last year. 36% businesses revealed that they expect to hire more workers as compared to 28% last year. Besides that, 90% of business owners are expecting to offer employees a pay rise and this number is also the highest in ASEAN,” he continued.

Business owners have also expressed that there is a decrease of lack of skilled workers – 48% to 36% and also a decrease in shortage of orders – 30% to 20%.

“Even though business growth prospects are positive, business owners are also preparing to face business impediments such as inflation for the year ahead,” he said.

The survey revealed that business owners are setting higher selling prices 28% as compared to just 8% last quarter. Other indications also shows that business owners are expecting to offer employees an above inflation pay rise in the next 12 months, 24% as compared to 18% last quarter.

“The proposed increase in toll prices, and the municipal assessments in Kuala Lumpur, as well as the increase in electricity tariff rates and public transportation pose a serious challenge to businesses owners. This can be seen from the survey results, as 54% business owners expressed that the rising energy and other costs are major constraints for them.”

“Additionally rising costs will affect Malaysia’s position as an investment choice,” he added.

Optimism in ASEAN region

The survey also reveals that businesses in the ASEAN region are optimistic about the economic outlook for the year ahead. 45% of businesses are positive and this has risen from 25% last year. Countries like Philippines (72% to 90%) and Vietnam (-10% to 40%) has experienced big increases.

Upbeat in G7 versus Uncertainty in BRIC

Dato’ NK Jasani said, “We’re braced for a momentum shift in the global business dynamic as we enter 2014. The BRICs have largely driven global growth since the financial crisis but the G7 economies are making a comeback – things are be improving in the eurozone. The contrast from 12 months ago is stark – as business leaders plan for 2014, growth prospects in the G7 look more robust but uncertainty is growing in the BRICs and cross Latin America."

In the BRICs though, expectations for revenue growth have fallen by 27 percentage points to 54% over the same period. Similarly, expectations for raising profits across the G7 were up 16 percentage points to 36% in Q4-2013 compared with 12 months previously while BRIC peers' expectations dropped 28 percentage points to 47% over the same period.

Dato’ NK Jasani added: “Twelve months ago, growth prospects in the G7 economies looked markedly different: Europe was in recession, the US was teetering over the fiscal cliff and Abenomics had yet to boost Japan. More recently we have seen growth return to these economies as unemployment falls and consumer spending rises. Consequently businesses are seeing renewed demand for their goods and services which translates into improved short and long-term growth prospects.

“The situation in the BRIC economies is more difficult. The prospect of the US Federal Reserve tapering its extensive quantitative easing programme sent emerging markets into a spin in 2013 and the signs are that this will finally happen at some point in 2014. Growth has slowed markedly in all four BRIC economies and while the outlook for China remains more stable, Brazil, India and Russia face serious economic and political challenges over the next 12 months. 

Hope for Balanced Economy

“The hope is that we are moving towards a more balanced global economy with fewer extremes. This should support business growth prospects; and less volatility means businesses can plan for the future and make decisions with greater certainty."


For more information please contact:

Sharon Sung, Technical and Corporate Affairs Partner, T  +60 3 2692 4022,


Charmane Koh, Corporate Affairs Assistant Manager, T  +60 3 2692 4022,

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