KUALA LUMPUR (Jan 30): Malaysia's business and consumer sentiment continued slipping for the second consecutive quarter in the fourth quarter of 2018 (4Q18).

According to a survey done by MIER, the 4Q18 Consumer Sentiments Index (CSI) dipped below the threshold of 100 points for the first time after two quarters, recording 96.8 points, while the business conditions index (BCI) slipped to 95.3 points.

Speaking to the press at its fourth quarter 2018 briefing today, MIER executive director Emeritus Professor Dr Zakariah Abdul Rashid explained that the CSI was down as sentiment sag on job and income conditions, while inflationary expectations edged up.

The survey revealed that the BCI is down on the back of deteriorating sales, production, new local orders, new export orders, capital investment and capacity utilisation.

Notably, in 2Q18, CSI breached the 100-point optimism threshold to a 21-year high of 132.9 while BCI improved to 116.3 points.

Zakariah explained that the indices in 2Q18 are an "overreaction" after the change of government and the sentiment has now began to normalise.

Nevertheless, going forward into 1Q19, Zakariah mentioned that the BCI is expected to increase marginally.

"Business expectation for 1Q19 is expected to moderate. With the improvement in future export, production is expected to be livelier, prices will stabilise, employment prospects are likely to remain stable and wage trend is expected to increase," said Zakariah.

Meanwhile, consumer expectations for 1Q19 is: hiring will remain sluggish, higher prices amid weak income expectations, and shopping plans will go on prudently, he added.