Malaysian business owners are gaining confidence in the country's economy, according to the latest Grant Thornton International Business Report (IBR), which pushed up the optimism level to 12% from -4%.
SJ Grant Thornton managing partner Datuk N.K. Jasani said the IBR also revealed that 52% of Malaysian businesses were expecting higher revenue for the year ahead. Meanwhile, 42% of businesses expect to invest in plant and machinery and 35% expect profitability for this year.
For the global economy, according to the report which surveyed 3,200 business leaders in 44 economies, global business optimism stood at 4% at end-2012, up from 0% a year ago.
However, this scenario is painted quite differently for Asia, in particular for Asean nations. The Philippines is the most optimistic at 72%, followed by Singapore at 26% and Thailand at 19%. However, Vietnam's optimism level has dropped from 34% previously to -10% for the year.
The IBR reveals a more mixed picture regionally. Business optimism in emerging markets like Latin America remained stable in the past year. The BRIC (Brazil, Russia, India and China) economies also remained consistently optimistic, while Asia Pacific excluding Japan saw a rise in optimism to 28% from 23% over the same period.
Comparatively, business optimism in North America swung from 6% in the fourth quarter of 2011 and then to 52% in second quarter of 2012 before declining to 1% in the fourth quarter of 2012.
Meanwhile, the G7 economies saw similar swings while businesses in Europe reported a slow decline in business optimism.
“The upswing in mature economy business optimism we saw in the first half of 2012 followed pronouncements by the European Central Bank and the Federal Reserve on the level of support they were prepared to provide their respective economies. However, this confidence has dissipated over the second half of the year.
“By contrast, emerging economies have remained far less volatile. It's a fascinating trend, which drives home where the major problems in the global economy lie at present,” he added.
He urged business owners to focus on their long-term growth objectives although the uncertainty in the economy elicits a “wait and see” policy from businesses. He added that opportunities exist for dynamic businesses, which were prepared to balance reason with instinct in their decision-making.
“Those that lock in their best people, be pro-active in marketing and backup planning and invest to be first out of the gate in a recovery are likely to find themselves ahead of the competition,” he said.