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Businesses regaining footing in Sultanate

Businesses of all sizes reported general improvements in their business conditions in January 2022, compared to the previous month, due to increased activities with further COVID-19 de-escalation plans in the Early Endemic Phase.

Micro and small businesses recorded a Business Sentiment Index (BSI) of 50.1, while medium and large businesses recorded a BSI or 50.2.

The BSI and sub-indices can be interpreted as: above 50 – expansion/optimism compared to the previous month; 50 – no change compared to the previous month; and below 50 – contraction/less optimism compared to the previous month.

This was reflected in Brunei Darussalam Central Bank (BDCB) publication yesterday of Brunei Darussalam’s BSI for the month of January 2022. The index is based on surveys conducted on over 550 micro, small, medium and large-sized businesses from 11 economic sectors in Brunei Darussalam, across all four districts.

The monthly index is designed to measure the level of business confidence or sentiment in the country and looks at current and future business conditions; current and future investments; current and future employment of workers; as well as current and future costs of running the businesses. The BSI serves as a leading macroeconomic indicator due to its forward-looking element.

Within the BSI, there are nine sub-indices. The Current Business Conditions sub-index, which is the main headline index for the BSI was 50.4 in January 2022. This was the fourth expansion observed across different sectors after the BSI recorded a contraction in September 2021.

More optimistic views were recorded in January 2022 as restrictions were eased with the commencement of the Early Endemic Phase on December 15, 2021. In general, businesses observed a rise in sales and activities with increased spending.

Among the comments from businesses on this increase include the bonus season; ability to operate back to normal hours; re-opening of schools; being awarded new projects; ability to hold more functions and events; as well as the Chinese New Year celebration.

The index for the one month ahead Business Conditions is recorded at 50.4 as businesses expect better business conditions in the near future should the COVID-19 situation in Brunei Darussalam improve.

The Investment sub-index was 49.9 for the current month, 50.5 for one month ahead and 50.3 for three months ahead. This indicates that although businesses generally invested less in January 2022 compared to December 2021, they are expecting to increase investment expenditures in coming months.

A few factors were cited for the increase, including opening of a new branch or outlet; purchase of machinery, equipment and materials for new projects; and to increase production capacity and to stock up more inventories for upcoming festive seasons such as Hari Raya where more sales will be expected.

The Employment sub-index was 50.1 for the current month and 50.1 for the month ahead, indicating that most businesses were hiring more employees in January 2022 with plans to continue to hire in February 2022.

Businesses, however, continued to highlight the challenges with COVID-19 restrictions including lengthy processes in hiring foreign workers to replace the workers who have returned to their home countries upon expiry of their contracts.

In general, businesses reported labour shortage and high turnover rate due to difficulties in hiring and retaining local workers. As such, some businesses have been actively hiring part-timers, especially to support the increased business activities in January 2022.

The Costs sub-index was 50.0 for the current month and 50.2 for the month ahead, indicating that businesses felt that the costs of running their businesses are about the same in January 2022 compared to December 2021, but expect operating costs to increase in February 2022.

Businesses expect further increases in operating costs in the near term due to higher prices charged by suppliers; rising material and shipment costs; and costs of hiring new workers, including agency fees for bringing in foreign workers.

In terms of economic sectors, optimism was recorded in seven out of the 11 sectors in January 2022, led by oil and gas related, finance and insurance, hotels and restaurants, and Health and education.

The Early Endemic Phase has allowed businesses to increase operations up to 75 per cent capacity. In January 2022, the transport and communication sector reported a small contraction, while the construction sector has remained pessimistic since August 2021 with a number of businesses reporting no new projects.

Agriculture, forestry, fisheries and livestock, and other private services sectors reported similar business conditions to December 2021, and are still facing similar challenges such as weather conditions, while in the latter sector, a number of businesses are reported to have ongoing contracts and projects.

The time-series charts for the BSI and its sub-indices since August 2020 can be found in Annex 1. For more information on BSI, the public can refer to the technical notes on the methodology and statistics in BDCB’s website at and follow updates on the BSI through future press releases and BDCB’s lnstagram account @centralbank.brunei.