Brunei Darussalam’s business sentiment index (BSI) stands at 49.9 in October 2022.
In general, private sector businesses were slightly pessimistic about their business conditions in October 2022 compared to the previous month.
This is due to expectations of a slowdown in activities, reduced domestic spending with the borders fully opened, as well as the rainy season which affects operations in some sectors, said Brunei Darussalam Central Bank (BDCB) in a statement.
Meanwhile, some businesses expected improvement in business performance with increased activities, as well as sales and projects compared to September 2022.
“Looking ahead, businesses were generally optimistic about their performance in November 2022 as indicated by the index for one month ahead, which stood at 50.4,” said the central bank.
This was driven by expectations of more projects and activities in November 2022.
Within the BSI, there are nine sub-indices with the Current Business Conditions sub-index as the main headline index.
The BSI is based on surveys conducted on more than 600 micro, small, medium and large-sized businesses from the 11 economic sectors in Brunei Darussalam, across all districts.
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.
Investment sub-index
The Investment sub-index was 50.3 for the current month, 50.0 for one month ahead, and 50.2 for three months ahead.
This indicates that, in general, businesses are expected to increase their investment expenditures in October 2022 and in the next three months.
The increase, amongst others, may be attributed to system upgrades; purchase of materials for projects; machinery and equipment; company vehicles; renovations and expansion of premises; the opening of new outlets/branches; and the stocking up of inventory.
Meanwhile, for November 2022, the level of investment expenditure is expected to remain the same as the previous month.
Employment sub-index
The Employment sub-index was 50.3 for the current month and 50.3 for one month ahead whereby businesses generally expected to hire more employees in August in anticipation of more projects and business activities in the next month, as well as to replace workers who have left.
Businesses are also expected to continue hiring workers in September 2022 as a large number of companies are still experiencing a shortage of workers and challenges in retaining local employees.
Costs subindex
The Costs sub-index was 50.3 for the current month and 50.4 for one month ahead.
Companies generally expected the costs of running their businesses to increase in October and November 2022.
Several factors were cited such as increased costs of food ingredients and raw materials such as cement and stones; higher shipment costs; maintenance works; project and salary expenses as well as recruitment costs; increased marketing activities; and purchase of flight tickets for outgoing foreign employees.
Economic sectors
In terms of economic sectors, 4 out of 11 sectors recorded optimism in October 2022.
The Finance and Insurance sector showed the largest increase in sentiment with better performance expected towards the end of the year.
The construction sector also expected an improvement in their performance due to increased projects.
On the other hand, six sectors showed pessimism in October 2022, citing fewer projects and sales due to more people travelling abroad and the rainy season.
The largest decrease in sentiment was from the Transport and Communication sector which was mainly due to a seasonal slowdown.
Meanwhile, businesses in the Real Estate and Ownership of Dwellings sector reported similar sentiments regarding their business conditions in October 2022 compared to September 2022.
In terms of sentiment by business size, only medium-sized businesses reported optimism in October 2022 with improved overall business conditions due to more projects and demand in general.
On the other hand, small-sized businesses reported pessimism due to the general downturn and inclement weather. Meanwhile, micro- and large-sized businesses expected similar business conditions to last month.
For more information on BSI, members of the public can refer to the technical notes on the methodology and statistics on BDCB website at www.bdcb.gov.bn and follow updates on the BSI through future press releases and BDCB’s Instagram @centralbank.brunei.
THE BRUNEIAN | BANDAR SERI BEGAWAN
