KUALA LUMPUR (May 27): Business sentiment in Malaysia is expected to soften slightly for the April-September 2025 period, with the overall net balance of expectations easing to 10.9%, down from 11.9% in the previous quarter, according to the Department of Statistics Malaysia (DOSM).

The confidence indicator is a short-term measure that shows how businesses feel about the current situation in different sectors in Malaysia. It is calculated by averaging the net balance of key business indicators.

Despite the slight dip, DOSM said confidence remains strong in key sectors of services, construction and industry.

However, wholesale and retail trade showed a more cautious outlook, with lower confidence about business prospects over the next six months.

DOSM noted that overall sentiment is still solid, supported by steady demand and resilience in most sectors, despite ongoing global uncertainties.

According to DOSM, state-level confidence was mixed in the second quarter of 2025 (2Q2025), with most skewed to the negative.

Kelantan, Penang, Perak, Selangor, Sarawak, Pahang, Labuan and Sabah had negative outlooks, with Kelantan the most pessimistic. In contrast, Kuala Lumpur, Johor, Perlis, Putrajaya, Kedah and Terengganu were more optimistic, with Terengganu the most confident.

For the second quarter of this year, 36.2% of businesses expect their revenue to increase, 21.7% expect it to decrease, and 42.1% expect it to stay the same, giving a net positive outlook of +14.5%.

For employment, 76.7% plan to keep their current staff, 16.2% plan to hire more, and 7.1% expect to reduce staff, resulting in a net positive outlook of +9.1%.

The national business confidence indicator for the current quarter stands at +2.0%, down from +3.2% in the first quarter. Sector-wise, both the services and construction sectors were down while industry was just barely up.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said businesses remain optimistic about 2Q2025, despite the slower momentum.