Malaysia's business confidence indicator increased sharply to 5.9% in the third quarter of 2026, up from negative 1.8% in the previous quarter, reflecting stronger expectations for domestic and external economic activity [1, 2, 3]. The industrial sector showed the largest gain, rising to 8.2% from negative 3.7% [1, 2, 3]. Construction confidence returned to positive territory at 4.1%, climbing from negative 9.5% in the second quarter [1, 2, 3]. Wholesale and retail trade sentiment also improved, reaching 1.2% from negative 7.5% [1, 2, 3]. The services sector remained optimistic with a confidence level of 5.2%, slightly below the previous quarter's 6.2% but well into positive range [1, 2, 3].
Businesses expressed increased optimism about conditions over the next six months. The net balance rose to 12.9% from 7.9%, with construction showing the strongest outlook at 23.3%, followed by industry at 14.3%, services at 13.1%, and wholesale and retail trade at 5.3% [1]. About 31.9% of businesses expect gross revenue to increase in Q3 2026, while 47.4% anticipate no change and 20.7% forecast a decline [1]. Most businesses, 78.3%, expect no change in employment; 13.9% plan to increase hiring; 7.8% anticipate workforce reductions [1].
At the state level, positive confidence readings were recorded in most regions. Terengganu led with 10.5%, followed by Kuala Lumpur at 9.5% and Negeri Sembilan at 9.4%, among others [1, 2, 3]. However, Melaka and Labuan showed negative confidence indicators of negative 3.9% and negative 5.4%, respectively [1, 2, 3].
The Department of Statistics Malaysia released the data on August 27, 2026, reporting the rebound and broad sector optimism for the quarter [1, 2, 3].
