RAM-CTOS BCI: Business sentiment for 1Q 2022 optimistic, full recovery uncertain

Published on 31 Mar 2022.

Share Tweet Email

KUALA LUMPUR, 31 March 2022 – RAM Holdings Berhad, in partnership with CTOS Data Systems Sdn Bhd, have released their findings through a joint Business Confidence Index (BCI) Survey for first quarter of 2022. As a valuable quarterly metric, the survey generates important information regarding business sentiment that is vital for policy makers to make informed decisions about the future. 

“We are pleased to collaborate with CTOS to launch this first sub-index of the RAM-CTOS BCI. Since we started the RAM BCI in January 2017, the survey has proven to be a reliable and leading barometer of forward business sentiments in Malaysia. With CTOS’s large subscriber base, we hope to capture the sentiments of a much larger pool of businesses that will further strengthen the utility of the BCI”, said Chris W.K. Lee, Group CEO of RAM Holdings Berhad. 

The 1Q 2022 RAM-CTOS BCI, the maiden sub-index of the RAM BCI, concluded in February 2022 showed business sentiment to be positive amid the reopening of the economy. The overall index charted a positive sentiment reading of 55.4, the first since the start of the pandemic. Readings of the main RAM BCI index for the previous five quarters had hovered below 40. A reading of above 50 indicates positive or optimistic sentiment.

“Business sentiment is often the first indicator for the future direction of the economy,” remarked Eric Hamburger, Deputy Group CEO of CTOS Digital Berhad. “CTOS has the largest customer base in the industry which allows us to monitor and access credit trends.  Findings from CTOS Credit Manager concur with the joint survey, with our subscribers pulling 17% more business credit reports since the start of 2022 compared to corresponding period in 2021 to carry out due diligence on new customers and re-evaluate existing customers. This is a good sign that businesses are beginning to increase operations and productivity.” 

This quarter’s poll results from over 140 respondents, 75% of which are small and medium enterprises (SMEs) and micro enterprises, may be interpreted as cautious optimism as many firms continue to report significant challenges in the near term.

Figure 1: RAM-CTOS BCI – Forward-looking business sentiment rebounded to pre-pandemic level

* The RAM-CTOS sub-index commenced in 1Q 2022. Data points prior to 1Q 2022 are derived from the main RAM BCI.

Note: The RAM-CTOS BCI survey polled 141 firms and was conducted online from 14 February 2022 to 1 March 2022. A reading above 50 indicates positive sentiments while below 50, negative sentiments.

Surveyed firms were most bullish about sales and hiring outlook, seen in the respective sub-indices rising to 60.2 and 60.7. The share of firms citing economic weakness as a significant challenge dropped to 50% from more than 80% in the same period last year. Most firms surveyed nonetheless expect capacity slack to persist, implying demand has not fully normalised as the pandemic may have irrevocably changed consumption habits.

Majority of businesses have yet to fully recover

Not surprisingly, around 55% of firms surveyed have yet to recover to pre-COVID levels, particularly for business services sector (62%) and smaller SMEs and micro firms (60%). Most of these firms foresee full recovery only from 2023. In contrast, only 12% of respondents, mainly from larger corporate firms, said business has surpassed pre-pandemic levels. Large corporates likely benefited from the sharp rebound in export sales last year on the back of robust external demand.

Figure 2: Full return to pre-pandemic level not expected within this year



Rising cost of doing business a major challenge

The road to full recovery is currently challenged by rising costs, which was cited by 62% of surveyed firms, making it the biggest concern this quarter. Higher raw material input cost is the most felt by surveyed firms, particularly manufacturing firms, while staffing cost was the next pain point.

Figure 3: More than half of firms saw raw materials cost register the biggest uptick



Smaller firms still need support to recover 

Our survey results indicate that SMEs and micro enterprises still trail behind corporates on the path to recovery. Although Malaysia’s transition into an endemic phase and the reopening of borders in coming months may boost prospects, firms would have to contend with rising costs and labour shortages that will eat into margins. Banks need to keep SMEs adequately funded during the recovery phase. Policymakers should continue to engage with vulnerable firms and address specific needs to ensure a uniform and faster recovery from the pandemic.


Analytical contact
Woon Khai Jhek, CFA
(603) 3385 2512

Media contact
Sakinah Ariffin
(603) 3385 2505

Shahlini Thirunavukarasu
(603) 2789 1620


The RAM-CTOS Business Confidence Index (RAM-CTOS BCI) is a comprehensive survey jointly conducted by RAM and CTOS, starting 1Q 2022, on forward looking business sentiment and topical issues faced by the small and medium business community in Malaysia. Released quarterly, the index offers a timely barometer of future economic activity to guide businesses’ investment decisions and planning as well as provide inputs for strategic policymaking by various stakeholders of the economy. This is done through the indication of positive and negative sentiment on five key aspects that are pertinent to their business operations over the next three months. The five business aspects surveyed are turnover, profitability, hiring, capital investment and capacity utilisation. An index value of 50 is the neutral benchmark while a value above 50 indicates positive sentiment by the firm; below 50 shows negative sentiment.

About RAM Holdings Berhad

RAM Holdings is a leading provider of independent credit research and advisory services. RAM Holdings (formerly known as Rating Agency Malaysia Berhad) was established in November 1990 as a catalyst for the domestic debt-capital market and as the nation’s first credit-rating agency. Its shareholders comprise both local and foreign financial institutions. On 1 July 2007, the rating operations were novated to a newly formed subsidiary, RAM Rating Services Berhad (or RAM Ratings). Today, RAM Holdings spearheads the cultivation of new businesses and continues to provide training as well as economic research that promotes financial and credit expertise, in addition to soft skills. For more information, log on to www.ram.com.my 

About CTOS

CTOS is Malaysia’s leading registered Credit Reporting Agency (CRA), regulated by Ministry of Finance under the Credit Reporting Agencies Act 2010. Established in 1990, CTOS facilitates credit extensions by empowering individuals and businesses with access to crucial information at greater ease and speed. CTOS delivers a complete portfolio of credit risk management solutions and services and is widely used by the country’s banking and financial institutions, insurance companies, telecommunication companies, large corporations, SMEs, legal firms and state bodies. For more information, visit our website at www.ctoscredit.com.my


No statement in this paper is to be construed as a recommendation to buy, sell or hold securities, or as investment advice, as it does not comment on the security's market price or suitability for any particular investor.


Published jointly by RAM Holdings Berhad and CTOS Data Systems Sdn Bhd
© Copyright 2022 by RAM Holdings Berhad and CTOS Data Systems Sdn Bhd