KUALA LUMPUR, Dec 23 (Bernama) -- Small Medium Enterprise Development Bank Malaysia Berhad (“SME Bank”) today released its SME Sentiment Index results for the second half of 2024 (2H 2024), revealing growing confidence in Micro, Small, and Medium-sized Enterprises (“MSMEs”). The index rose to 55.8 (up from 54.7 in 1H 2024), marking its third consecutive increase and the highest score since the survey’s inception.

“The upward trend reflects improving economic growth, robust sales expectations, and renewed plans for expansion and job creation. This reaffirms MSMEs’ critical role in Malaysia’s economic trajectory, further strengthened by the Madani Government’s focus on fostering sustainable and inclusive growth, particularly in paving a positive outlook for our MSMEs to continue to thrive in our ever-changing and competitive business environment,” said Datuk Dr. Mohammad Hardee Ibrahim, Acting Group President/Chief Executive Officer of SME Bank.
 
Key Highlights at a Glance:

· MSMEs more confident in economic growth - led by the accommodation sector.
· Large businesses showed the highest optimism, reversing their earlier pessimism from 1H 2024.
· Micro businesses remained cautious but expressed strong aspirations to export, with 20% keen to enter foreign markets - despite current minimal exposure (5%).
· MSMEs may face lower profitability despite higher sales, due to a broad-based increase in costs.
· MSMEs continue to steer towards sustainability-ready.
· Decisions to hire are largely guided by business expansion plans.
· Business expansion emerged as the top focus area amid growing confidence among MSMEs. Marketing/branding has lost its crown to business expansion, after preserving its top spot since the inception of this SME Sentiment Index survey in 2022.
· Neutral impact from targeted subsidy, progressive wage and e-invoicing. Micro businesses have the lowest cash reserves.
 
“As one of Malaysia’s leading development financial institutions mandated to empower the MSME value chain, we continue to provide value to our MSMEs that extends beyond financing. The SME Sentiment Index survey reaffirms our commitment in providing a clear and succinct overview of the overall SME landscape and the resounding positive momentum recorded in the recent survey further reinforces our MSMEs' position as an important segment of our economy as they contribute significantly to Malaysia’s overall growth trajectory.” Datuk Dr. Mohammad Hardee elaborated.
 
Lynette Lee Li Qing, Chief Economist of SME Bank commented, “Malaysia’s economy continued to expand to 5.2% in the first nine months of 2024, and the sentiment is in tandem with a better national Gross Domestic Product (“GDP”) growth expectation for 2025, where SME Bank forecasts the economy to grow between 4.5% to 5.5%.”
 
“Other forward-looking indicators, such as the Department of Statistics Malaysia's (“DOSM”) Business Tendency Survey also predict favourable business conditions in the coming months. While optimism is on the rise, MSMEs continue to face ongoing challenges, including higher cost pressures and greater vulnerability to exchange rate fluctuations due to rising import and export activities, which could potentially impact profit margins if not managed effectively,” she added.
 
The majority of the respondents from all business sizes foresee an economic expansion with large-sized businesses taking the lead, comprising 63% of the respondents, while the micro-sized are the least optimistic (50%). This was a complete reversal compared to 1H’s results where large-sized businesses were the most pessimistic, expecting an economic slowdown compared to micro-sized ones which assumed an economic expansion. Large companies could be riding on resilient domestic demand and improvement in international trade, where merchandise trade volume is expected to broadly expand by 3.0 % year-on-year in 2025 against 2.7% in 2024.  Micro businesses currently have the least exposure to exports (5%) but are the keenest (20%) to sell their products to foreign countries in the future.

The survey, conducted between August and November 2024, has hit a new record high of 1,485 respondents (1H: 1,295), encompassing participants across all states in Malaysia, representing a wide range of sectors and business sizes. This in-depth study garnered valuable data on the perspectives and experiences of MSMEs – offering a macro-level overview of the business environment that serves as a benchmark for overall future economic performance. The complete SME Sentiment Index 2H 2024 report, published by SME Bank, is available at:  https://www.smebank.com.my/sme-sentiment-index.  

Issued by:
SME Bank Group Strategic Communication


SOURCE : SME Bank

FOR MORE INFORMATION, PLEASE CONTACT:
Name : Arnee Ismail
Head, Group Strategic Communication
SME Bank
Tel : 03-2615 2954
Email : arnee.ismail@smebank.com.my

--BERNAMA