85.8 pct of businesses surveyed ‘uncertain, not confident’ that Sarawak’s economy will recover next year

Dato Tan Jit Kee

By Nur Ashikin Louis

KUCHING, Sept 24: Some 85.8 per cent of 316 businesses in Sarawak are taking a very cautious view and have little or no confidence that the economy will recover by 2022.

The Associated Chinese Chambers of Commerce and Industry of Sarawak (ACCCIS) president Dato Tan Jit Kee noted that of the various businesses it surveyed, 45.9 per cent held an uncertain view whether the economy would recover while 39.9 per cent were of a neutral opinion.

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Only 14.2 per cent of the respondents were confident that the economy will recover in 2022.

This result was based on ACCCIS’s survey report on the Sarawak Economic Situation which was conducted between Aug 12 to 31, with a total of 361 respondents ranging from micro enterprises, small and medium enterprises (SMEs) and large enterprises spread throughout the State.

“The results showed that most businesses are struggling to cope with a drawn-out Covid-19 pandemic impact. Their production and operation activities have been limited, there has been a decline in demand and they are anxious about poor cash flow, credit and debtors’ conditions.

“Some 36.4 per cent of respondents have experienced a very tight cash flow problem and are unable to cover the costs of business operations, raw materials, manpower for three months.

“Revenues were badly hit with 80.5 per cent of the respondents’ business revenues markedly below pre-pandemic levels.

“While businesses are looking forward for a smooth transition towards a safe reopening of the economy under the National Recovery Plan (NRP), backed by the acceleration of the national vaccination programme, most businesses, however, expect our economy and business conditions to get worse in the second half of 2021,” he said in a virtual press conference via Zoom today.

Tan further said that ACCCIS hopes that the Government, relevant Ministries and agencies would come up with effective policies and work closely with business chambers’ and other stakeholders to provide a more conducive environment for businesses post Covid-19.

“We hope that the State Disaster Management Committee (SDMC) will draw up practical initiatives and functional measures in our quest to overcome the challenges of the Covid-19 pandemic, in particular, to speed up the opening up of the economic activities and lift up the workforce capacity of our civil service as soon as possible,” he added.

In the same report, ACCCIS disclosed that 52.5 per cent of respondents said the overall economic situation in Sarawak was worse off in the first half of 2021, while 3.5 per cent had performed better and 44 per cent remained neutral.

Compared to the first half of 2021, 64.9 per cent respondents predicted a worsening economic prospect in the second half of 2021.

“As for the outlook in 2022, the number of respondents with a pessimistic view was reduced to 45.5 per cent from 58.2 per cent in 2021, and those who held a view of a better outlook increased to 10.8 per cent while 43.7 per cent remained neutral.

“Overall, most of the businesses have foreseen that the economic prospect in 2021 would worsen due to the prolonged pandemic impact and strict containment measures that have caused deep economic scarring effects. The business community holds a pessimistic view and adopted a cautiously neutral approach on the economic outlook for 2022,” said ACCCIS secretary-general Jonathan Chai when presenting the survey report.

The survey also concluded that the top five factors that have impacted business performance in the first half of 2021 were targeted areas for lockdown (55.7 per cent), increase in prices of raw materials (53.2 per cent), high operating costs and cash flow problem (50.3 per cent), changing of consumer behaviour (49.4 per cent) and declining business and consumer sentiment (48.1 per cent).

Other significant factors cited by the respondents include the political climate, lower domestic demand, lack of financing, disruptions of the supply chain, increase bad debt and delay payments, the Malaysian Ringgit’s fluctuation, shortage of raw materials, availability of skilled labour and lower external demand. — DayakDaily

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