Moderate Q2 outlook for housing

WITH the prevailing cool sentiments in the economy, the Malaysian Institute of Economic Research (Mier) said the outlook for the residential sector for the 2nd quarter of this year appeared to be moderate while some improvements might be seen in the automotive industry.

However, it felt that the retail trade and tourism markets might be in for a rough ride in the 2nd quarter.

In its 2003 1st quarter sectoral survey released on Monday, Mier said the problem of the property overhang continued in the 1st quarter of this year.

However, it said survey respondents in the residential property sector planned to maintain existing levels of production, prices, hirings, wages and even sales.

''Because job growth will remain modest, companies may not feel compelled to boost wages to attract workers,'' it said.

Mier said the tamer prices, coupled with financial conditions such as readily available credit and low interest rates, might just be able to stir consumer interest again in the months ahead. ''That would boost consumer spending, which spells good news for economic growth soon,'' it added.

On its retail trade survey, Mier said a sense of cautiousness continued to prevail in the sector during the 1st quarter this year.

Mier survey revealed that business situation was likely to worsen in the 2nd quarter as the full impact of the Severe Acute Respiratory Syndrome (SARS) outbreak filtered through.

On the automotive industry, the survey showed that it did not do too well in the first quarter.

Source: The Star (14/05/2003)