Economic Highlights : Business Conditions And Consumer Sentiment Improved, In Line With Brighter Economic Prospects - 16/04/2010

The Malaysian Institute of Economic Research’s (MIER) business conditions index (BCI) increased by 5.3 percentage points to 124.0 in 1Q 2010, from 118.7 in the 4Q (see Chart 1). This was the fifth consecutive quarter of picking up and the highest level in six years, suggesting that businesses felt more confidence, in line with
a recovery in the global and local economy. Already, exports surged by 27.6% yoy in January-February, compared with +5.1% in the 4Q of last year. Similarly, industrial production strengthened to 9.5% yoy, from +2.5% during the same period. As a result, manufacturers have been recruiting workers for the last nine consecutive months.

Similarly, the imports of capital goods rose by 18.4% yoy in the 4Q, before easing to 6.3% in January-February, suggesting that businesses are beginning to invest, albeit cautiously. As a whole, the improvement in BCI index suggests that private investment will likely improve and we expect it to bounce back to increase by 10.0%
in 2010, from -21.8% in 2009.

Economic Highlights : Business Conditions And Consumer Sentiment Improved, In Line With Brighter Economic P...