Malaysian businesses remain optimistic in year 2011 says Grant Thornton survey
Kuala Lumpur, 5 January 2011: Businesses in Malaysia remain positive about the outlook of the Malaysian economy for the year 2011. The results of the International Business Report (IBR), a survey of over 11,000 businesses per year across 30 economies have shown that a balance of +50% of Medium to Large Enterprises (MLEs) in Malaysia are optimistic for the year ahead as compared to a balance of +49% the year before. This is the highest recorded optimism level for Malaysia since its participation in IBR.
1Shares of world GDP based on PPP according to IMF World Economic Outlook 2007.
Are our neighbours optimistic?
The ASEAN countries have shown a healthy increase of the optimism level from a balance of +46% in year 2010 to +57% in year 2011. The Philippines reigns as the most optimistic ASEAN country at +87% in the region followed by Singapore at +65%, however the business owners in Vietnam has expressed that they are less optimistic this year with a balance of +62% as compared to +72% last year.
Optimism in the Asia Pacific Region
Asia Pacific, last year’s leading region for business optimism, has seen a significant fall from +64% to +50% as economies such as mainland China (down from +60% in 2010 to +42%), Australia (down from +79% in 2010 to +37%) and New Zealand (down from +66% to +35%) showed large negative swings in optimism.
Dato’ N.K. Jasani, Managing Partner of SJ Grant Thornton said, "The global recession has caught up with Australia and New Zealand – it appears they have both been through something of a ‘reality check’ over the last 12 months."
“China experienced warning signs of rising inflation of 5.1% in November, reflecting increases in the cost of food and energy, increasing the likelihood of further interest rate increases. Low costs, particularly of labour have powered the Chinese economy over the past few years, so it is of little surprise that business confidence is being knocked by these new challenges,” he continued.
Optimism in other Regions
Confidence levels over economic performance are higher in Latin America than any other part of the world as the region leads the way on business optimism into the New Year, according to the 2011 Grant Thornton International Business Report (IBR). 2011 is the first year Latin America has led the world on optimism.
Across Latin America, a balance of +75% of MLE owners are optimistic about their region’s economic performance in 2011. Elsewhere, optimism in the Asia Pacific region (excluding Japan) is at +50%, whilst in North America it is just +26%, with Europe the least optimistic region at +22%.
Within Latin America, Chile (+95%) scored the highest optimism of any country surveyed followed by Brazil (+79%), Argentina (+70%) and Mexico (+64%).
Businesses around the world expect weak investment in 2011 The IBR reveals that business owners expect to see only moderate levels of investment in 2011. 35% more businesses expect to see increases in investment in plant and machinery and only 24% more expect to see an increase in research and development (R&D). A notable exception to this trend is mainland China where +47% of businesses expect to increase investment in plant and machinery, and +61% expect to increase their R&D. |
Dato' N.K. Jasani, |
In Malaysia, 68% business owners indicated that they foresee an increase in revenue and 45% on increase on profitability for the year ahead. In terms of investment, 51% businesses are expecting to increase investments in plant and machinery and also 18% in new building. 32% expect to increase their R&D.
Dato’ Jasani said, "Sooner or later businesses will need to invest if they want to continue to grow. Governments in these economies need to create environments that encourage business investment. But with interest rates already at historic lows in many mature economies the option to reduce them further and stimulate investment is not available. Therefore they will need to be creative. Some of this creativity might be directed towards the banks where lending activity to businesses in a number of economies has been low as they seek to rebuild statements of financial position in the wake of the financial crisis."
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For further information please contact:
Sharon Sung
Technical & Corporate Affairs Director
T +603 2692 4022
E sharonsung@gt.com.my
Notes to editors
About SJ Grant Thornton:
SJ Grant Thornton is a member firm of Grant Thornton International Ltd and provides assurance, tax, corporate finance, restructuring and other specialist services to private and public listed companies. With four offices across Malaysia – Kuala Lumpur, Penang, Johor Bahru and Kuantan, and access to more than 2600 partners in over 100 countries worldwide, we have invaluable local expertise supported by global reach.
About Grant Thornton International:
Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms providing assurance, tax and specialist advisory services to privately held businesses and public interest entities. Clients of member and correspondent firms can access the knowledge and experience of more than 2600 partners in over 100 countries and receive the same distinctive, high quality and personalised service wherever they choose to do business.
Grant Thornton International strives to speak out on issues that matter to business and which are in the wider public interest and to be a bold and positive leader in its chosen markets and within the global accounting profession.
About IBR:
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of over 11,000 businesses per year across 39 economies. This unique survey draws upon 19 years of trend data for most European participants and nine years for many non-European economies.
Data collection
The research is carried out primarily by telephone interview lasting approximately 15 minutes with the exception of Japan (postal), Philippines and Armenia (face to face), mainland China and India (mixture of face-to-face and telephone) where cultural differences dictate a tailored approach. Telephone interviews enable Grant Thornton International to conduct the exact number of recommended interviews and to be certain that the most appropriate individuals are interviewed in an organisation which meets the profile criteria.
Data collection is managed by Grant Thornton International's core research partner - Experian Business Strategies. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Q4-2010 fieldwork took place in November/December 2010.
Sample
METHODOLOGY
Locally, the sample tends to cover the industries mentioned previously, with some countries being able to have local valid data for specific sectors or regions when the sample size is large enough.
Who to Contact
Technical & Corporate Affairs
T +603 2692 4022
F +603 2732 1010
E corporate@gt.com.my
