The BCI, which was derived from a survey conducted among 3,500 firms, pointed to its lowest level since its inception two years ago.

The Corporate and SME Index declined to 55.1 and 51.0 respectively with any value above 50 denoting positive sentiment.

However, the current downtrend implies that businesses have a less upbeat outlook for 2019.

One of the main reasons for the downtrend was said to be the weak economic prospects over the next six months. Decelerating domestic growth, uncertain global demand and investment activities as well as a lack of positive catalysts, including the relatively neutral Budget 2019, all played a part in the generally weaker business sentiment expected in the next six months.

The respondents of the survey were the least bullish on the construction sector.

“The SME construction sector showed a reading of 49.7 due to the absence of growth catalysts and the overhang in the property sector,” RAM said in a statement.

Another sector that displayed pessimism in the Q1-Q2 2019 survey was SME retail, whose performance outlook slipped back into negative territory after a brief expansionary momentum aided by the tax-free window from June to August 2018.

Faced with uncertain global and domestic economic prospects, consumers were being more prudent with their spending again, leading to weaker sentiment in retail consumption in 2019, RAM said.

Amid weaker prospects, firms are also holding back on capacity building.

The subindices that track corporate business expansion, capital investment and hiring have fallen to their lowest levels since the inception of the RAM BCI, after having declined in three consecutive surveys.