Kuala Lumpur – A combination of rising business opportunities and improved demand and cash-flow conditions encouraged Malaysia’s businesses to invest more in capital and staff in the last quarter of 2013, according to findings from ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA) in their Global Economic Conditions Survey (GECS).
The GECS quarterly survey, the largest regular economic survey of accountants in the world, gauging the views of ACCA and IMA finance professionals globally, revealed that in the fourth quarter of 2013 both business confidence and economic sentiment improved. Some 21% of the Malaysian sample reported confidence gains, up from 13% in the previous quarter, while 51% reported a loss of confidence in their own organisations, down from 56% previously. Just under a third of the sample (31%, up marginally from 30%) were optimistic about the state of the economy, while the pessimists made up 62% of the sample, down from 65%.
This confidence gains among Malaysian respondents is concurrent with the reported 5.1% growth in Malaysia’s GDP in the fourth quarter of 2013, which Bank Negara Malaysia stated was supported by private sector demand and improvement in exports.
However, ACCA and IMA pointed out that dark clouds could be on the horizon.
Jennifer Lopez, head of ACCA Malaysia, said: “Although the headline findings show a positive picture amongst Malaysian businesses, the increase in optimism and dynamism has taken place against the odds and may not survive long. A closer look at what finance professionals in Malaysia are telling us shows that respondents reported a substantial tightening in the supply of growth capital, fewer investment opportunities, and, most importantly, a year-long increase in price and exchange rate volatility.”
Emmanouil Schizas, ACCA Senior Economic Analyst, said: “As with other markets, economic recovery is a delicate period. While there are a lot of positive signs in what the finance professionals working inside Malaysia’s businesses are telling us, how they perceive the economy and their own organisations’ prospects over the course of 2014 will be a strong indication of whether recovery can be sustained.”
The Global Picture
GECS, now in its fifth year, revealed that at the global level, finance professionals had more faith in the strength of the wider economic recovery in Q4 2013 than at any time over the last five years: 55% believed conditions were improving or about to do so, up from 53% in the third quarter of 2013, while only 42% felt that economic conditions were deteriorating or stagnating, down from 43% in the previous quarter.
When it came to their own organisations, however, finance professionals’ confidence may have fallen marginally in the last quarter of 2013. About 30% reported confidence gains, up from 28% previously, but 35% reported losses, up from 32% in the third quarter. Despite this, the Q4 2013 results still represent the second-strongest year-on-year confidence gains since mid-2010.
You can download the GECS Q4 2013 report from the related documents section of this page.
This is the 20th edition of GECS, carried out jointly by ACCA and IMA and is the largest regular economic survey of accountants in the world, both in terms of the number of respondents and in terms of the numbers and scope of economic variables it monitors. Its main indices are good predictors of GDP and daily trend deviations correlate well with the VIX ‘fear’ index.