MALAYSIAN INSTITUTE OF ECONOMIC RESEARCH aka INSTITUT PENYELIDIKAN EKONOMI MALAYSIA (149064-U)

MALAYSIAN INSTITUTE OF ECONOMIC RESEARCH

INSTITUT PENYELIDIKAN EKONOMI MALAYSIA (149064-U)

 

Upcoming Events: 2012

19 January	Press Conference on Quarterly Survey Results and Malaysian Economic Outlook Fourth Quarter 2011 MIER, Level 2, Podium City Point, Kompleks Dayabumi

 

 http://www.mier.org.my/

 

MIER SURVEYS

The Business Conditions Survey

The Business Conditions Survey was first mounted in the second quarter of 1987 to provide input for the Institute's economic forecasting activity. It is conducted on a quarterly basis to assist in assessing the short-term outlook for the economy. The survey findings are used to supplement the availability of quantitative information from conventional sources. A Business Conditions Index is constructed from the survey results which gives advance information that permits inferences to be drawn regarding emerging economic trends.

The survey covers a sample of over 350 manufacturing businesses incorporated locally and foreign manufacturing concerns operating in Malaysia, covering 11 industries. Questions posed in the survey questionnaire are on key determinants such as production level, new order bookings, sales performances, inventory build-up and new job openings. Reports of the survey findings are published two weeks after the end of each quarter.

Click here to go to the latest BCI

Business Conditions Index: BCI3Q2011

STILL EXPANDING BUT SLOWER

• Index 9.5 points lower at 104.5 points
• Sales, production and new export orders lower
• New local orders and capacity utilization stable
• Expect lower production and export sales over next three months

The Survey of Consumer Sentiments

The Survey of Consumer Sentiments, initiated in January 1987, is a series of surveys conducted quarterly on a sample of over 1200 households in Peninsular Malaysia to gauge consumer spending trends and sentiments. Consumer behaviour reflects income level and general economic conditions. Together with the business conditions survey, findings of this survey relating to consumer spending are incorporated into MIER's short-term economic outlook report.

Repondents are asked about perceptions on their household's current and expected financial positions and their employment outlook. The survey also seeks to uncover general economic conditions such as inflation as seen from the consumers' perspective. Questions relating to their plans to buy houses, new or used cars and other major consumer durable are also asked. A quarterly Index of Consumer Sentiments is generated from the survey.

Click here to go to the latest CSI

Consumer Sentiments Index: CSI3Q2011

A SENSE OF RETICENCE

• CSI slips y-o-y to 108.7 points
• Current incomes moderating
• Employment and financial expectations quiescent
• Worries over inflation continue
• Shopping plans on low gear

 MALAYSIAN ECONOMIC OUTLOOK

Executive Summary

The global economic outlook remains fluid and increasingly worrying. Further deterioration in the economic and financial environment in the Eurozone will likely weaken U.S. further, with repercussions for international trade. Further monetary policy easing beside the "operation twist" will be necessary in 2012 to revive the U.S. economy. China and other emerging economies are heading for a soft landing in the near term. Weaker global outlook, which reduces demand for commodities, will bring about lower inflationary pressures ahead. In turn, this may provide leeway for policy easing in selected economies, such as China. 

In Malaysia, the 2Q11 GDP growth edged lower to 4.0 percent year-on-year due to a weaker domestic demand. By sector, services (6.3 percent) and manufacturing (2.1 percent) were the main growth engines. Economic growth momentum will probably moderate from 2H11 onwards arising from a weaker exports outlook. Further implementation of ETP projects and Budget 2012 handouts will boost domestic demand, but unlikely to offset underperformance in net exports. Against this background, MIER downgrades 2011 GDP growth rate to 4.6 percent year-on-year. For 2012, MIER revises the GDP growth forecast to 5.0 percent. 

As a result of protracted slowdown in global and regional economic outlook, MIER's Business Conditions Index (BCI) and CEO Confidence Index (CEO) eased to 104.5 points and 93.3 points, respectively in 3Q11. In contrast, the Consumer Sentiment Index (CSI) edged up marginally to 108.7 points, on receding inflationary expectations. Seasonal factors lifted Retail Trade Index (RTI) higher to 128.4 points. Easing supply disruptions pushed Automotive Industry Index (AII) higher to 150.0 points.

Recent foreign exchange liberalization measures will be neutral on the performance of ringgit since higher direct investment abroad will be offset by inflows from more trade finance and easier borrowing rules from nonresident related companies. Thus, RM/USD is projected to average around 3.00 in 2011. Improving macroeconomic fundamentals will see an average RM/USD of 2.95 in 2012.

Heightened global risk aversion resulted in sudden reversal in government bond market and sell-off in Asian currencies and equity markets. The ringgit fell 3.3 percent in NEER terms, while the FBMKLCI sagged 4.2 percent in Sep-11. With further unwinding of USD carry trades, the RM/USD is forecasted to average around 3.20 in 2011, before appreciating to 3.10 in 2012.