More Than 91,500 Jobs Created From 3,886 Projects Last Year
Malaysia recorded a total of RM113.5 billion worth of approved investments involving 3,886 projects in the manufacturing, services and primary sectors from January to September, 2017.
However, this was 26.5% lower than the investment of RM154.3 billion approved in the same period last year.
These investments are estimated to create more than 91,500 employment opportunities.
According to the Malaysian Investment Development Authority (MIDA), the decline was mainly attributable to the lower quantum of approved investments recorded in the services sector, where there was a drop of 37.6%.
This was in line with the subdued property market that is expected to persist until the end of the year.
Malaysian Companies Were the Lead in all Main Sectors
As a result of approvals associated with lumpy projects (Pengerang and RAPID project in Johor) and the softening global FDI trend for this sector as highlighted by UNCTAD’s World Investment Report 2017, the manufacturing sector too declined by 15.5%
“Despite this moderation, Malaysia’s strategy of positioning local companies as the primary driver of the country’s growth is paying off.
“More than 73.5% of the approved investments were from local sources, with foreign investments making up the rest,” said MIDA.
MIDA pointed out that during the period, Malaysian companies were the lead in all main sectors – manufacturing, services and primary.
“The higher component of approved domestic investments is in line with the Government’s drive to ensure sustainable economic growth in the future. Under the Economic Transformation Programme (ETP) domestic investments are targeted to account for 73% of total investments by the year 2020,”.
In the 2018 Budget, local companies especially small and medium enterprises (SMEs) received a big boost of RM23.7 billion in the form of allocations, grants, soft loans and guarantees.
The Government is positive that with the comprehensive allocations that cover various aspects of SME development and empowerment, local companies will be able to rise to the challenge to spearhead the economy of tomorrow.
The services sector attracted RM69.2 billion worth of investments from 3,386 projects that are poised to generate 57,884 employment opportunities.
“Out of the total, 81.2% or RM56.2 billion were from domestic sources and balance 18.8% or RM13.0 billion were from foreign sources.
“The bulk of the investments in the services sector were from real estate with RM28.4 billion, followed by ICT (RM7.9 billion), distributive trade (RM7.2 billion), financial services (RM6.6 billion) and utilities (RM6.5 billion),” said MIDA.
MIDA also said that a policy review on Principal Hub (PH) scheme was undertaken earlier this year and since its completion in July 2017, MIDA has approved 6 PH projects with investments worth RM1.5 billion in the third quarter of 2017.
The agency is currently in the process of evaluating several PH projects and MIDA foresees that more sizeable investments could be approved soon.
In the manufacturing sector, a total 464 manufacturing projects worth RM35.0 billion were approved in the first nine months of 2017 with more than 32,700 jobs created for Malaysians.
Domestic Investments were Dominant
A majority of these investments were in petroleum products including petrochemicals (RM12.4 billion), electronics and electrical (E&E) (RM8.8 billion), chemicals & chemical products (RM2.7 billion), non-metallic minerals (RM2.5 billion) as well as scientific & measuring equipment (RM2.0 billion). These make up 81.1% of total approved investments for this sector.
Domestic investments were dominant, accounting for nearly 60% of the total investment approved for the sector while the balance was contributed by foreign sources. In terms of foreign investments, the top sources were Switzerland, Netherlands, Singapore, Hong Kong and Germany. These five countries jointly accounted for 63.4% of total foreign investments approved in the manufacturing sector for this period.
As for approved manufacturing projects by each state, Sarawak registered the highest recipient of approved investments amounting to RM10.5 billion, followed by Penang (RM9.9 billion), Johor (RM3.7 billion), Melaka (RM3.2 billion) and Selangor (RM3.0 billion).
Collectively, these states contributed 86.6% or RM30.3 billion to the total approved investments. These projects will contribute more than 26,000 job opportunities to these states.
From January – September 2017, the primary sector attracted investments worth RM9.3 billion, 390.5% higher than the amount reported in the corresponding period last year. Investments by domestic sources totalled RM6.4 billion while foreign investments contributed RM2.9 billion.
Quality FDIs will continue to be important due to its interplay with domestic investment, particularly in capacity building through transfer and diffusion of skills and technology. As at the second week of December 2017, MIDA has 252 projects in the pipeline for the manufacturing and services sectors with total proposed investment of RM10.5 billion. Majority of these investments are in the machinery & metal products, chemicals, global establishment as well as green technology industries.