Private sector businesses were slightly pessimistic about business conditions in April compared to the previous month, said Brunei Darussalam Central Bank (BDCB) yesterday in its Brunei Darussalam’s Business Sentiment Index (BSI) for April 2024.
“Survey results showed that sentiments were mixed across sectors. Some businesses shared optimistic remarks with expectations that Hari Raya Aidilfitri promotions and the resumption of normal operating hours after the fasting month would improve business activities in April 2024.
“However, some businesses shared concerns that there would be fewer projects and dampened consumer demand as consumers may either be preoccupied with Hari Raya celebration or are travelling abroad during school holidays. Some businesses also planned to allow their staff to take additional leave during the festive period, which may lead to reduced business activities,” it said in the report.
Businesses are also expected to increase their level of investments over the next few months. For April, businesses invested in several areas, including purchasing new vehicles, equipment and machinery in preparation for upcoming projects and to increase production capacity; expanding and renovating business premises and opening new branches; upgrading systems and IT infrastructure to improve security; and replenishing stock and inventories in anticipation of better sales. Looking ahead, businesses expect to increase investment levels as part of their expansion plans and to support ongoing and new projects.
Continuing the trend from previous months, businesses generally expected to continue to hire and increase their employee headcount to replace those who have left as well as to ensure adequate manpower in support of business expansion plans and upcoming projects, while they also expected the costs of running their businesses to be higher.
Similar to March 2024, many businesses attributed their expectations of higher costs in April to an increase in overall labour costs from increased employment and overtime payments. Some businesses also paid bonuses in April, while a few expressed concerns about rising oil prices and the appreciation of the US dollar, which have led to higher logistics and raw material costs.
For the month ahead, businesses expected an increase in employee headcount would contribute to higher operating costs.
In April, seven out of 11 sectors expected optimistic business conditions, with the hotels and restaurants sector reporting the highest optimism, mainly driven by promotions and elevated demand for their services during Hari Raya festivities.
The agriculture, forestry, fisheries and livestock sector also attributed their optimism in April to expectations of higher sales for their products as a result of better harvests and a seasonal trend of higher demand due to the festive season.
The construction sector meanwhile attributed their slightly positive sentiments to expectations of new projects, whereas the other private services, and finance and insurance sectors also expected better business performance compared to the previous month.
The real estate and ownership of dwellings sector and the health and education sector were slightly optimistic with expectations of increased demand for their services in April. On the other hand, two sectors showed pessimism for April: businesses in the manufacturing sector generally expected business activities to be slower with less orders and lack of projects during the Ramadhan and Hari Raya period; and the oil and gas sector attributed lower sales due to less favourable market conditions.
The transport and communication sector and the wholesale and retail trade sector expected similar business conditions to that of March this year.
Medium-sized businesses were generally slightly optimistic sentiments in April compared to March, mainly due to expected pick-up in business activities following the end of the fasting month in mid-April. On the contrary, large-sized businesses expected conditions to worsen compared to the previous month, citing expectations of business activities and sales to drop during the Ramadhan and Hari Raya period. Meanwhile, micro- and small-sized businesses expected similar business conditions in April, compared to the previous month.
The BSI is based on surveys conducted on almost 500 micro, small, medium, and large businesses from 11 economic sectors in the Sultanate. The monthly index is designed to measure the level of business confidence/sentiment in the country covering various aspects including current and future business conditions; investments, employment of workers, as well as costs of running the businesses.
Therefore, the BSI serves as a leading macroeconomic indicator with its forward-looking element in the country.
