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Positive outlook: Businesses expect surge in demand

Micro and large-sized companies reported expectations of better business conditions in October 2023 compared to the previous month in terms of the index by business size.

Generally, these businesses felt positive regarding their performance with expectations of more activities and increased customers from higher demand for goods and services.

Meanwhile, medium-sized companies indicated slight pessimism with expectations of lower domestic spending due to people travelling overseas. Small-sized businesses reported similar business conditions in October 2023 to the previous month.

These details were revealed yesterday in Brunei Darussalam’s Business Sentiment Index (BSI) for October 2023 published by Brunei Darussalam Central Bank (BDCB).

The index is based on surveys conducted on over 500 micro, small, medium and large businesses from 11 economic sectors in the Sultanate across all districts.

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. The BSI serves as a leading macroeconomic indicator with its forward-looking element in the country.


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.

There are nine sub-indices within the BSI. The main headline index, which is the Current Business Conditions sub-index was 49.7 in October 2023.

This indicates that, in general, businesses in the private sector expected worsening business conditions compared to the previous month.

Survey results showed that, while many companies reported similar business conditions to the previous month, the overall contraction was driven mainly by the oil and gas companies experiencing weaker market conditions, lower crude oil prices, and reduced operations in October 2023. Other companies attributed a general reduction in business activities, resulting in lower sales.

For November 2023, the index for one month (1M) ahead stood at 50.0, indicating an expectation of a similar level of business activities as October 2023. The investment sub-index was 50.1 for the current month, 50.2 for 1M ahead, and 50.1 for three months (3M) ahead.

This indicates that, in general, businesses are expected to increase their investment expenditures in October 2023 and the next few months. These investment expenditures include renovations, purchase of new equipment and machinery, as well as project-related materials.

Several businesses highlighted the need to stock up inventories in preparation for future projects and upcoming festivities. Others also planned on expanding their offices and business operations in the near term by renovating or opening new outlets.

The employment sub-index was 50.0 for the current month and 1M ahead.

In general, businesses plan to maintain their labour headcount for October and November 2023, as many companies are still seeking to hire suitable employees to replace those who have resigned.

The costs sub-index was 50.6 for the current month and 1M ahead. Companies generally expected the costs of running their businesses to be higher in October and November 2023 due to an anticipated increase in staff-related expenses, including new hires, overtime pay and salary increases. In general, companies continue to face higher operating costs due to several factors such as rising material prices and other items, purchase of raw materials as well as maintenance and repair works.

In terms of economic sectors, five out of 11 sectors recorded optimism in their business conditions in October 2023. The construction sector emerged as the top sector with an index of 50.3 due to more activities and projects. The transport and communication sector attributed better performance expectations to new projects, an increase in customers and the addition of new air flights.

The health and education sector expected better conditions with the new school term and reduced costs. The wholesale and retail trade sector expected an increase in sales, while the manufacturing sector anticipated more projects that would contribute to their increase in performance.

On the other hand, companies in the oil and gas sector reported pessimistic sentiment due to weaker market conditions, lower crude oil prices, and reduced operations.

Other private services, and hotels and restaurant sectors also recorded pessimism due to expiring contracts and expectations of fewer activities.

Meanwhile, real estate and ownership of dwellings, finance and insurance, and agriculture, forestry, fisheries and livestock sectors reported similar business conditions to September 2023.