Business Interest in Malaysia Still Going Strong Despite Global Economic Challenges
Foreign Investments Increase Despite Economic Challenges
Business interest in Malaysia continues to climb steadily despite the global economic challenges and competitive landscape.
Approved investments in the first half of 2019 (1H2019) stemmed from manufacturing, primary sectors and the services sector. Growth in the same period last year was only at RM85.5 billion. This year’s H12019 increase was at a rate of 7.6%. The steady growth by business in Malaysia is expected to create 59,542 employment opportunities.
The largest increase in total investments was from the services sector at RM55 billion. The manufacturing sector was next, with RM33.1 billion in investments. The primary sector came in third with a total of RM3.9 billion. Business interest continues to be dominated by foreign investment. In the manufacturing, primary and services sector, foreign investment alone accounts for the 97.2% increase experienced. Domestic investments in 1H2019 only contributed 46.2% by comparison.
Competitive and comparative advantages remain among the strongest reasons for continued business interest in Malaysia.
Growth in the Services Sector
H12019 saw Malaysia receive a total of 2,150 in approved projects, which are expected to generate 28,650 job opportunities approximately. Domestic investments accounted for the bigger portion of this approval at 59.3%. The remainder stemmed from foreign investment. The most notable approved project for 1H2019 is the Large Scale Solar (LSS) expansion project. The project will be carried out by TNB Bukit Selambau Solarin Bukit Selambau, Kedah.
Growth in the Manufacturing Sector
Positive 1H2019 growth is driven by its robust manufacturing sector performance. The increase experienced this year is 74.2% from 1H2018, with approved investments totalling RM33.1 billion. Most of these investments are from foreign sources, and expected to create 30,449 job opportunities.
Leader the charge for foreign business interest in Malaysia is the United States, followed closely by China, Singapore, Japan and the British Virgin Islands in that order. All five countries contribute to the combined total of 92% total foreign investment growth.
The Ministry of International Trade and Industry (MITI) continues to encourage business interest in Malaysia through MIDA. They encourage more local companies to partake in the global value chain as the government drafts the 12th Malaysia Plan. As Malaysia slowly moves away from labour-intensive projects, it continues to pursue capital intensive projects the way it has been consistently doing.
Growth in the Primary Sector
4.2% of H12019’s total approved projects came from the primary sector. Mining continues to the leading subsector in this area, with RM3.6 billion worth of approved investments. This is followed closely by commodities (RM257.3 million) and agriculture (RM48.6 million). Business interest in these sectors are expected to generated 443 employment opportunities.