Malaysia's economy is set to expand further this quarter and the rest of the year, riding on the wave of strong domestic consumption and investments, according to a study by business information firm Dun & Bradstreet Malaysia Sdn Bhd (D&B).
In its first quarterly Business Optimism Index (BOI) for the country, D&B said that despite the slowdown in the global economy, Malaysian businesses remained upbeat about local market conditions.
It found that positive sentiments were affirmed in all six of the survey's leading business indicators volume of sales, net profits, selling price, inventory levels, employees and new orders.
For the second quarter, volume of sales and net profits posted the highest net optimism levels at 50.5 per cent and 49.6 per cent, respectively, it said.
Hiring expectations were also off to a strong start, as employment was likely to increase to 34.6 per cent, it said, while selling price and inventory levels were expected to experience modest increases at 14 per cent and 10.8 per cent points, respectively.
According to the study, new orders for the manufacturing sector registered a net optimism of 40 per cent, a four-fold increase from the actual optimism level in the first quarter.
Of the six sectors, wholesale, services and financial sectors emerged as the three leading industry verticals from the quarterly study. Volume of sales and net profits for the wholesale sector are expected to increase sharply to 85 per cent and 60 per cent, respectively, a two-fold increase from the actual optimism level reported for the first quarter.
Furthermore, financial sector companies were anticipated to increase their hiring levels for the second quarter.
Meanwhile, D&B said the services sector remained buoyant, with the government announcing its plan to liberalise sub-sectors covering transport, tourism, healthcare and logistics by early 2014.
According to the quarterly study, the sector is likely to experience a substantial increase in volume of sales at 60.6 per cent and stronger hiring at 42.4 per cent.
D&B explained that the overall strong showing reflected the government's forecasts of an economic growth of between 4.5 per cent and 5.5 per cent this year.