KUALA LUMPUR (Jan 15): Confidence levels among Malaysian businesses fell sharply as they entered the new year, a latest quarterly study revealed.

In a study conducted by Dun & Bradstreet Malaysia, the overall business optimism index (BOI) has moderated downwards to +8.92 percentage points in the first quarter of this year (1Q19), compared with +12.99 percentage points in 4Q18.

However, on a year-on-year comparison, the overall BOI has risen slightly from +7.25 percentage points in 1Q18.

"Moving into 1Q19, we expect sentiments among local firms to moderate due to weaker growth within the external-oriented industries such as wholesale trade as well as the muted outlook among construction and mining firms.

"For 2019, however, firms have anticipated higher investments for business expansion compared to the previous year. This is particularly in the area of technological investments in software, infrastructure and machinery and capital equipment," said Dun & Bradstreet (Malaysia) Sdn Bhd chief executive officer Audrey Chia in a statement.

Six business indicators were included under the quarterly BOI study, namely volume of sales, net profits, selling price, inventory level, employees and new orders.

According to the study, only two (employment levels and inventory levels) of the six indicators have climbed upwards on a quarter-on-quarter basis.

Notably, volume of sales contracted from +25.98 percentage points in 4Q18 to +7.06 percentage points in 1Q19, and net profit declined from +15.69 percentage points in 4Q18 to +8.82 percentage points in 1Q19.

Selling price fell visibly from +7.35 percentage points in 4Q18 to +2.94 percentage points in 1Q19, while new orders dropped slightly from +17.16 percentage points in 4Q18 to +15.88 percentage points in 1Q19.

The study revealed that the transportation, services and wholesale sectors have emerged as the most upbeat sectors while the construction and mining sectors are the least optimistic.