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Optimistic business conditions in Brunei

Brunei Darussalam Central Bank (BDCB) yesterday published the Sultanate’s Business Sentiment Index (BSI) for the month of April 2022. The index is based on surveys conducted on more than 600 micro, small, medium and large-sized businesses from the 11 economic sectors in the country.

The monthly index is designed to measure the level of business confidence/sentiment in the country and cover various aspects including current and future business conditions; investments; employment of workers; as well as costs of running the businesses. Therefore, BSI serves as a leading macroeconomic indicator with its forward-looking element.

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

Within the BSI, there are nine sub-indices. The current business conditions sub-index, which is the main headline index for the BSI, was 50.3 in April 2022. This was the seventh expansion since October 2021. Despite some businesses expecting April 2022 to be a slower month due to Ramadhan, there were generally optimistic business conditions during the month as the economy continues to gradually recover from the third wave of COVID-19. Most businesses expected improved demand and productivity with fewer employees being issued with quarantine orders, more projects and activities; as well as improved sales such as new car sales and flight ticket sales following the re-opening of air borders on April 1, 2022. The index for the one month (1M) ahead Business Conditions was 50.4, indicating businesses’ optimism about a possible increase in sales with promotions offered during the Hari Raya Aidilfitri celebrations in May 2022, as well as further easing of restrictions.

The investment sub-index was 49.9 for the current month, 50.4 for one month (1M) ahead and 50.3 for three months (3M) ahead. This indicates that businesses generally expected to reduce investment activities and inventory in April 2022 compared to the previous month since they had already increased their investment activities in the first quarter of the year. Nevertheless, many businesses have plans to increase their investment expenditures in the coming months including opening of new branches/outlets: carrying out renovations and upgrading of business premises; and purchasing and replacing machinery and equipment. The employment sub-index was 50.1 for the current month, and 50.1 for 1M ahead, indicating that most businesses expected to hire more employees in April 2022 and will continue to hire in the next month. Overall, businesses were still facing manpower challenges mainly due to the lengthy process of on boarding foreign workers as well as the existing skills mismatch issue in the labour market. Nonetheless, businesses are expecting to continue their recruitment activities to meet manpower shortage issues, especially as their foreign employees have left or are leaving to return to their home countries following the expiry of their work permits.

The costs sub-index was 50.3 for the current month and 50.0 for 1M ahead, indicating that businesses expected to continue to face increased costs of running their businesses in April 2022. A similar situation was also expected for the month of May 2022. Some businesses planned to spend on more marketing activities in April 2022, as well as on wages and commissions for employees as a pick-up in sales was expected. Businesses have been experiencing rising costs in the past few months especially on logistics: transportation; raw materials: food; and oil. Businesses generally expected the upward trend in prices to continue in the near-term.

In terms of economic sectors, there was an improvement compared to March 2022 with six out of 11 sectors recording optimism. The largest expansion was led by transport and communications (50.6), likely on expectations of more travel activity with the easing of border restrictions. This is followed by expectations of higher sales in the wholesale and retail trade sector (50.4), as well as better performance in the oil and gas related sector (50.3).

On the other hand, three sectors namely construction (49.7), agriculture (49.9), forestry (49.9), fisheries and livestock (49.9); and other private services (49.9) showed pessimism in April 2022 with indices below the threshold of 50. The reasons cited included a seasonal slowdown due to the month of Ramadhan; fewer projects; and on-going manpower shortages. Meanwhile, manufacturing (50.0) and real estate and ownership of dwellings (50.0) reported similar current business conditions in April 2022 compared to March 2022.

In terms of business size, overall sentiment had improved in April 2022 compared to the previous month micro (50.1) and large-sized (50.2) businesses have reported expansions as their businesses were expected to continue to benefit from the improved COVID-19 situation in Brunei Darussalam, as well as better sales figures. Meanwhile, small (49.9) and medium-sized (49.9) businesses reported contractions due to the slowing down of activities during Ramadhan and other factors such as logistics and manpower challenges.

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 Instagram account @centralbank.brunei.