(Bandar Seri Begawan, 24th) Brunei's business confidence saw a slight decline in May this year. The latest Business Confidence Index (BSI) released by Brunei Darussalam Central Bank (BDCB) showed the index stood at 49.7, and compared with the previous month, overall pessimism has somewhat weakened.
The decline was mainly due to seasonal slowdown after Hari Raya, project completions, and pressures on the oil and gas industry from market fluctuations and operational challenges. Rising raw material costs, supply chain disruptions, and subdued consumer spending further dampened sentiment, especially among micro, small, and medium-sized enterprises (MSMEs).
However, optimism has not completely disappeared. The forward-looking expectation index for the next month rose to 50.3, indicating large enterprises are expected to lead a moderate economic recovery, as they anticipate a rebound in production activities following project launches and post-maintenance.
The central bank stated in its report: “The confidence gap between MSMEs and large enterprises is widening, with small businesses facing greater difficulties due to labor shortages and reduced domestic spending.”
Despite the current subdued market sentiment, investment intentions remain slightly positive, with index values for current, 1-month, and 3-month horizons all above 50. Enterprises across sectors indicated plans for equipment upgrades, staff training, facility expansion, and inventory replenishment, reflecting confidence in future demand, especially as major events like the 31st Consumer Fair are being held.
Employment confidence remains cautious, with a current index value of 49.7, but is expected to edge up to 50.2 next month. Although there were layoffs in May due to contract expirations and resignations, some enterprises plan to hire part-time staff and interns before seasonal events commence to fill vacancies.
The operating cost index remains slightly above the neutral level at 50.1, but the outlook index for next month has fallen to 49.7. Following surges in project, staffing, and logistics-related expenditure, many companies expect spending patterns to normalize in June.
Among the 11 economic sectors surveyed, real estate and home ownership were the most optimistic (50.7), due to higher occupancy rates and rising demand. Other optimistic sectors included hotels and catering, construction, finance and insurance, as well as healthcare and education.
In contrast, wholesale and retail trade remained sluggish (49.5), dragged down by weak domestic demand and overseas consumer spending. Confidence also declined in the oil & gas, transportation and communications, and agriculture sectors, citing price pressures and seasonal slowdowns.
Enterprises of all sizes expressed pessimism, with MSMEs being hardest hit. Large enterprises struggled with operational delays and staff absenteeism, while smaller businesses faced a lack of new projects and reduced post-holiday activity.
Business Conditions in May 2025: 49.7; Next Month's Outlook: 50.3
Investment (Current): 50.1; Employment (Current): 49.7; Operating Cost (Current): 50.1
As a forward-looking indicator, the BSI provides valuable insights into the economic pulse of Brunei's business community. Although market sentiment remains mixed, a cautious momentum seems to be building, largely driven by capacity-building investment and anticipated post-holiday demand.
The full BSI report and methodology are available on the Brunei Darussalam Central Bank (BDCB) website.
The decline was mainly due to seasonal slowdown after Hari Raya, project completions, and pressures on the oil and gas industry from market fluctuations and operational challenges. Rising raw material costs, supply chain disruptions, and subdued consumer spending further dampened sentiment, especially among micro, small, and medium-sized enterprises (MSMEs).
However, optimism has not completely disappeared. The forward-looking expectation index for the next month rose to 50.3, indicating large enterprises are expected to lead a moderate economic recovery, as they anticipate a rebound in production activities following project launches and post-maintenance.
The central bank stated in its report: “The confidence gap between MSMEs and large enterprises is widening, with small businesses facing greater difficulties due to labor shortages and reduced domestic spending.”
Despite the current subdued market sentiment, investment intentions remain slightly positive, with index values for current, 1-month, and 3-month horizons all above 50. Enterprises across sectors indicated plans for equipment upgrades, staff training, facility expansion, and inventory replenishment, reflecting confidence in future demand, especially as major events like the 31st Consumer Fair are being held.
Employment confidence remains cautious, with a current index value of 49.7, but is expected to edge up to 50.2 next month. Although there were layoffs in May due to contract expirations and resignations, some enterprises plan to hire part-time staff and interns before seasonal events commence to fill vacancies.
The operating cost index remains slightly above the neutral level at 50.1, but the outlook index for next month has fallen to 49.7. Following surges in project, staffing, and logistics-related expenditure, many companies expect spending patterns to normalize in June.
Among the 11 economic sectors surveyed, real estate and home ownership were the most optimistic (50.7), due to higher occupancy rates and rising demand. Other optimistic sectors included hotels and catering, construction, finance and insurance, as well as healthcare and education.
In contrast, wholesale and retail trade remained sluggish (49.5), dragged down by weak domestic demand and overseas consumer spending. Confidence also declined in the oil & gas, transportation and communications, and agriculture sectors, citing price pressures and seasonal slowdowns.
Enterprises of all sizes expressed pessimism, with MSMEs being hardest hit. Large enterprises struggled with operational delays and staff absenteeism, while smaller businesses faced a lack of new projects and reduced post-holiday activity.
Business Conditions in May 2025: 49.7; Next Month's Outlook: 50.3
Investment (Current): 50.1; Employment (Current): 49.7; Operating Cost (Current): 50.1
As a forward-looking indicator, the BSI provides valuable insights into the economic pulse of Brunei's business community. Although market sentiment remains mixed, a cautious momentum seems to be building, largely driven by capacity-building investment and anticipated post-holiday demand.
The full BSI report and methodology are available on the Brunei Darussalam Central Bank (BDCB) website.