The Brunei Darussalam Central Bank (BDCB) has published the Business Sentiment Index (BSI) for August 2024, reflecting overall optimism in the nation’s business environment. The BSI, derived from surveys of more than 500 businesses of varying sizes across 11 key economic sectors, measures current and future business confidence in the Sultanate.
For August 2024, the headline BSI stood at 50.2, indicating slight improvement in business conditions compared to the previous month. Businesses in several sectors reported higher demand for goods and services, as well as the initiation of new projects during this period. However, some sectors raised concerns about weak performance due to consumers traveling abroad during the second school term holiday.
The one-month-ahead (1M) sub-index for business conditions showed similar optimism, standing at 50.3, reflecting expectations of increased production, market activities, and project developments for September 2024.
Investment levels for August 2024 were also encouraging, with the current investment sub-index at 50.1, while the 1M ahead and three-month-ahead (3M) sub-indices were recorded at 50.1 and 50.3, respectively. Businesses foresee increased investments in inventory, IT upgrades, and expansion-related projects in the coming months.
Employment sentiment remained stable, with businesses continuing to replace resigned employees and hiring additional full- and part-time workers to meet operational needs. The current employment sub-index was 50.3, while the 1M ahead sub-index stood at 50.2.
Businesses in August 2024 faced rising operational costs, reflected by a costs sub-index of 50.3 for both the current month and the next. Higher costs were attributed to increased business activities, salary expenses, workforce expansion, and maintenance. Additionally, businesses anticipate further cost increases in September due to new projects, branch openings, and higher shipping fees.
Among the 11 economic sectors surveyed, four sectors reported optimism for August 2024. The Transport & Communication sector led the way with a sub-index of 50.7, buoyed by increased demand during the school holidays. The Health & Education and Construction sectors also posted positive results due to improved conditions and new projects, respectively. The Oil and Gas Related sector reported improved productivity.
On the flip side, five sectors expressed pessimism, primarily due to the seasonal effects of the school holiday. The Hotels & Restaurants sector reported the lowest confidence with a sub-index of 49.6, while the Wholesale & Retail Trade and Finance & Insurance sectors echoed concerns about subdued market conditions. Both the Manufacturing and Agriculture, Forestry, Fisheries & Livestock sectors cited adverse weather for their decreased outlook.
Business sentiment varied by size, with micro and large businesses showing optimism for August, reporting sub-indices of 50.1 and 50.2, respectively. Meanwhile, small and medium-sized businesses expected no change from July, with both segments recording sub-indices of 50.0.
The BSI has become an important tool for tracking macroeconomic trends in Brunei Darussalam, with forward-looking data providing insight into the overall confidence of the business community.
