KUALA LUMPUR (Oct 10): Malaysia's 2017 business sentiment is deemed to be on a good note on growth in the nation's crucial industries and as companies here benefit from the government's policies.

Dun & Bradstreet (M) Sdn Bhd chief executive officer Audrey Chia said in a statement today that the construction besides the electronics-based and food and beverage manufacturing industries are crucial sectors contributing to the nation's improved business sentiment.

"We expect the outlook for Malaysian businesses to end off on a relatively good note for 2017. This is largely attributed to positive growth within the construction sector as well as an increase in electronics, food and beverage manufacturing activities over the recent months. On the domestic front, the government has a development plan in place which focuses on boosting the country's labour productivity, skills upgrading of employees and infrastructure, which bodes well for businesses here and making Malaysia competitive in high value-added sectors.

"As an open economy, however, Malaysia is highly vulnerable to any increase in protectionism, which is a non-negligible possibility in the current anti-globalisation environment. With the acceleration in inflation rates, a slowdown in consumer spending and dampening of household sentiments will also be expected. Hence, we remain cautiously optimistic in our outlook for the rest of the year," Chia said.

Dun & Bradstreet's statement is in conjunction with the announcement of the company's Malaysia's Business Optimism Index (BOI) survey results for 2017's fourth quarter (4Q17). The BOI is based on a survey involving 200 business owners and senior executives from major industries across Malaysia.

"The six business indicators under the quarterly BOI study include volume of sales, net profits, selling price, inventory level, employees and new orders.

"The index figures used in the survey represent the net percentage of survey respondents expecting higher sales, profits, etc, compared with the same quarter of the previous year. The indices are calculated by subtracting the percentage of respondents expecting decreases from the percentage expecting increases," Dun & Bradstreet said.

According to Dun & Bradstreet, business sentiment among Malaysian firms improved in 4Q17 in year-on-year (y-o-y) and quarter-on-quarter (q-o-q) terms.

In y-o-y terms, the company said the BOI rose 5.52 percentage points in 4Q17 compared to the 3.83 percentage-point rise in 4Q16. On a q-o-q basis, the BOI increased 5.52 percentage points in 4Q17 versus the 3.4 percentage-point rise in 3Q17, the company said.