Business Conditions Index: BCI3Q2011

In my previous post, I did mention that if BCI continues to trend down for Q3, a double dip recession is likely in Malaysia.The BCI for Q3 has just been released by MIER. 


The gist of it: Business is still expanding but slower. 
The highlights:

1. Index down a marginal 9.5 points to 104.5 q-o-q. 
2. Sales, production and new export order has dropped q-o-q as predicted in Q2.
3. A further slump in sales and production is anticipated as we move into the final months of 2011.

As long as the index stays above 100 points threshold, it will not be a sign of contraction, yet. Still, keep our eyes open for any global economy news for Q4. And it's US corporate earnings season again. As of the writing of this post,Google just reported that its third-quarter revenue was one-third higher than last year - good news for the Street! Also, retail sales in the US increased 1.1 percent in September, the biggest gain in seven months and twice what economists projected. Retail sales are a key barometer of consumer spending, the biggest contributor to economic activity. Consumers account for 70 percent of economic activity. If they cut back, a recession is more likely. When they spend more, economic growth is more likely.


In conclusion, if you have got all your eggs (money) in one basket (stock market or equity fund) still, I would watch the eggs closely. Cash in when the bear starts to roar!