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Increase in Brunei’s business activities in July

Brunei Darussalam Central Bank (BDCB) yesterday published the Sultanate’s Business Sentiment Index (BSI) for July 2022.

The index is based on surveys conducted on more than 500 micro, small, medium and large-sized businesses from the 11 economic sectors in the country.

The monthly index is designed to measure the level of business confidence/sentiment in the country and cover various aspects including current and future business conditions; investments; employment of workers; as well as costs of running the businesses. Therefore, BSI serves as a leading macroeconomic indicator with its forward-looking element.

The BSI and sub-indices can be interpreted as: above 50 – expansion/optimism compared to the previous month; 50 – similar / no change compared to the previous month; and below

50 – contraction/less optimism compared to the previous month.

Within the BSI, there are nine sub-indices within the BSI. The current business conditions sub-index, which is the main headline index for the BSI, was 50.4 in July 2022. This indicates that businesses were generally optimistic on expectations of an increase in business activities and sales in July 2022. Several sectors expected to benefit from the demand from Haj season and Hari Raya Aidiladha, and events and festivities associated with His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam’s 76th birthday celebration. The oil and gas related sector expected to benefit from higher oil prices and an increase in production volumes. Some businesses, on the other hand, foresaw a slowdown of their business activities due to the resurgence of COVID-19 cases, less consumer spending, and several public holidays during the month

As for August 2022, businesses were generally optimistic as indicated by the index for one month (1M) ahead, which stood at 50.3. This was driven by expectations of an increase in sales and more projects, as well as general improvement in business activities with more foreign workers and shipments of inventories coming in. With the re-opening of land borders commencing on August 2022, some businesses shared concerns that it may reduce sales as more people would travel out while some expressed that it may benefit them instead, with the revival of demand for goods and services from foreign customers.

The investment sub-index was 50.5 for the current month, 50.0 for one month (1M) ahead, and 50.3 for three months (3M) ahead. This indicates that, in general, businesses expected to increase their investment expenditures in July 2022 with the purchase of new equipment and machinery, expansion of premises; and stocking up of inventory. While the level of investment expenditure is likely to remain the same in August 2022, businesses expected it to pick up again three months from now.

Meanwhile, the Employment sub-index was 50.2 for the current month, and 50.2 for 1M ahead whereby businesses generally expected to hire more employees in July 2022 in anticipation of increased projects and business activities, as well as to replace workers who have left their companies. Businesses also expected to continue hiring workers in August 2022 to address the ongoing issue of manpower shortage that has been driven in part by delays in recruiting foreign workers and also challenges in hiring local employees.

The costs sub-index was 50.3 for the current month and 50.1 for 1M ahead, indicating an expected rise in the costs of running businesses in July and the following month. Among the reasons reported include higher costs of raw materials; increase in logistics and transportation costs; more expenditure required on maintenance, training, overtime pay, payroll for new hires; and flight tickets for outgoing foreign employees.

In terms of economic sectors, six out of 11 sectors recorded optimism in July 2022.

Transport and communications, and finance and insurance sectors showed the largest increases in sentiment, as better performance is expected with further relaxation measures.

The oil and gas related sector was also expecting an improvement in its performance and profit levels, supported by higher production and high oil prices. On the other hand, the other private services sector showed pessimism in July 2022 as lower productivity is expected due to shortage of workers. Meanwhile, the manufacturing, construction, real estate and ownership of dwellings, and health and education sectors reported similar sentiments regarding their business conditions in July 2022 compared to June 2022.

In terms of the index by business size, only large-sized businesses reported optimism in July 2022 on expectations of increased sales and profits due to more production and business activities in general.

Meanwhile, micro, small and medium-sized businesses expected similar business conditions to the previous month.

For information on BSI, the public can refer to the technical notes on the methodology and statistics in BDCB’s website at and follow updates on the BSI through future press releases and BDCB’s Instagram account @centralbank.brunei.