On the other hand, the manufacturing and retail sectors remained upbeat despite the pressures stemming from the foreign conflicts.
“This optimism appears to have been supported in particular by stronger export demand in the March quarter, despite manufacturers reporting an easing in both cost and pricing pressures over the quarter, manufacturing sector profitability deteriorated,” the report read.
Investment cuts among firms
Meanwhile, another 12% of the report’s respondents also indicated that they plan to cut back on their building investments over the coming year, while another nine per cent plan to reduce investment in plant and machinery.
“The recent developments with the Strait of Hormuz shipping restrictions and fuel price surge have increased caution amongst firms, as reflected in firms’ hiring and investment intentions,” the report read.
“We expect the upcoming General Elections in November to add another layer of uncertainty.”
