SME Association of Malaysia secretary-general Chin Chee Seong said most small and medium-sized enterprises (SMEs) were keeping a conservative outlook for the remainder of 2023 and acting cautiously in view of that.

“SMEs are pessimistic about the situation. Most are not expanding their businesses and are just trying to hold on to what they have now, to make sure costs do not run over,” Chin told FMT.

He said business was good for most SMEs during the first three months of the year, due to the Chinese New Year and Hari Raya Aidilfitri celebrations.

However, there was a significant downturn after the festivities were over.

“After Hari Raya, business has been bad. Sales are dropping, and spending in the retail market has been quite slow.

“Overall, it’s just normal growth for the first five months, nothing that excites our businessmen. Our members do not have high hopes,” he said.

Mydin hypermarket managing director Ameer Ali Mydin said revenue from January to April had improved by at least 10% compared with the same period last year, due to Hari Raya coinciding with the back-to-school season.

“But in the month of May, there has been a huge drop in sales. Business has dropped by almost 10%, if you compare year to year.

“Moving forward, we expect the market to be quite quiet for the next few months,” he said.

Malaysian International Chamber of Commerce and Industry (MICCI) president Christina Tee said MICCI’s export documentation showed a slowdown in exports by at least 20% across sectors.

Tee said various supply chains also seemed to be experiencing some decline in output.

“This may be due to pent-up demand last year, resulting in customers with high stock levels. This caused the global supply chain to readjust its demand,” she said.

Malaysia’s economy had recorded an impressive first quarter gross domestic product growth of 5.6%. This demonstrated a growth of 0.9% compared with the preceding quarter on a seasonally adjusted basis, Bank Negara Malaysia had said.