by RUPINDER SINGH
BUSINESS confidence in Malaysia remains positive heading into the second quarter of 2025 (2Q25), though recent data suggests sentiment may be softening, particularly across certain sectors and regions.
According to the Department of Statistics Malaysia (DOSM), the overall confidence indicator stood at 2.%, slightly down from 3.2% in 1Q25.
While still in positive territory, the marginal dip reflects a more cautious tone among businesses.
“Businesses continue to anticipate a favourable business environment,” said Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin.
“This is supported by a positive confidence indicator of 2%, which reflects sustained optimism from 1Q25,” he added.
Among the sectors, Services continues to lead, registering a confidence level of 6.9%. However, this is notably lower than the 13.5% recorded in 1Q25, suggesting a moderation in expectations.
The Construction sector also showed a similar trend, with confidence easing to 4.6% from 12.5%.
The Industrial sector saw a modest improvement to 1.9% from 0.2%, indicating a slightly better outlook compared to earlier quarters.
The Wholesale and Retail Trade sector remains the outlier, with sentiment still in negative territory. The confidence indicator improved slightly to –6.7%, up from –8.1%, but this continued cautiousness highlights ongoing challenges for consumer-facing businesses.
In a new addition to the quarterly report, DOSM provided state-level confidence indicators for the first time.
The data revealed mixed results.
Positive sentiment was recorded in six states and territories, including Terengganu (18%), Kedah (4.3%) and Putrajaya (3.7%).
However, a majority — including economically significant states such as Selangor (–1.2%), Penang (–5.1%) and Perak (–6.3%) — posted negative readings, indicating varied expectations across the country.
Looking ahead, businesses maintain a generally optimistic view for the April to September 2025 period.
The net balance of business expectations for the next six months stands at 10.9%, a slight decline from 11.9% previously.
DOSM noted that “sentiment in the Services sector remains sturdy,” maintaining a net balance of 18.3%.
The Construction and Industrial sectors also project a favourable outlook, at +13.1% and +12.% respectively.
Meanwhile, the Wholesale and Retail Trade sector continues to reflect a more cautious stance.
While the national outlook remains broadly positive, the slowdown in several sectors and muted sentiment across many states underscore the need for vigilance.
Businesses appear to be navigating the post-pandemic recovery with measured expectations, mindful of both domestic challenges and global economic uncertainties.
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