ASEAN KEY DESTINATIONS
Business confidence down in Malaysia
The Global Economic Conditions Survey (GECS) for the second quarter of 2012, undertaken by ACCA (Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants), cautioned that growth across the world's most developed economies has stalled once again and that the global economy is as fragile as it has ever been in the last three years.
It said only 12 per cent of respondents reported confidence gains, down from 20 per cent in the previous quarter, while 50 per cent reported a loss of confidence.
Moreover, only 18 per cent now believe the global economy is on the road to recovery, down from 38 per cent three months earlier.
“On first inspection, Malaysia appears to have experienced a complete reversal of all of the gains of early 2012.
However, ACCA and IMA stress that this simple interpretation misses important trends. “The last quarter saw access to finance deteriorate, although pressures on demand are not yet on the rise,” it said in a statement.
Over the last year, respondents have consistently reported that there are fewer profitable opportunities available for firms to invest in than three months ago, 61 per cent now believe this, compared to 46 per cent nine months earlier.
“Rising inflation is another consistent pattern, with 72 per cent of respondents now reporting problems.
“Supply chains are clearly under pressure, with late payment rising steadily over this period, and opportunities to benefit from collaboration in the supply chain falling,” it said.
ACCA senior economic analyst and survey editor Manos Schizas said finance professionals who responded to this survey were quite at ease with the prospect of austerity until mid-2010.
“The point now is to see how far and how fast the Chinese slowdown will travel.
“Our members in Africa tend to feel any fallout from Asia fairly quickly, and there could be implications for other markets which trade with China Malaysia included,” said Manos.
According to the survey, the flip side of the Chinese slowdown is a recovery for the US economy, where investment is on the rise and confidence is high, despite significant potential problems.
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