KUALA LUMPUR, Aug 5 — Malaysia has emerged as the most important country for businesses in the Association of South-east Asian Nations (Asean) and Greater China looking to venture into over the next three years, according to the UOB Business Outlook Study 2024 released today.
The annual study, now in its fifth year, surveyed more than 4,000 small and medium-sized enterprises (SMEs) and large enterprises across seven markets, including over 500 Malaysian businesses and found them optimistic about the country’s growth prospects.
“The UOB Business Outlook Study indicates that local businesses are gearing up for a period of growth as they are bullish on Malaysia’s economic potential.
“Overseas businesses are looking to expand into Malaysia due to the country’s strong economic fundamentals and attractiveness as a regional business hub,” UOB Malaysia CEO Ng Wei Wei said in a statement accompanying the study.
Ng highlighted several factors contributing to this optimism, including the China+1 strategy, the upcoming Johor-Singapore Special Economic Zone, and the upcycle of the global semiconductor industry.
The survey found that more than seven in 10 Malaysian businesses are positive about the current business environment, with 76 per cent expecting improved business performance this year.
The most optimistic sectors include industrials, oil and gas (90 per cent), and manufacturing and engineering (80 per cent).
Despite the positive outlook, many businesses are still recovering from the economic slowdown and are concerned about inflation and higher operating costs.
The survey also revealed that almost 80 per cent of Malaysian businesses aim to expand overseas to boost profits and enhance their international reputation.
Asean and mainland China were highlighted as the top two markets for expansion, with Indonesia being the most important country for local businesses to venture into, followed by Singapore, Thailand, and Brunei.
The survey emphasised the importance of sustainability, with over eight in 10 local businesses acknowledging its significance in attracting investors.
However, only 39 per cent of these businesses have implemented sustainability practices, with the manufacturing and engineering sector leading the way at 53 per cent.
The UOB survey found that companies are requesting more financial support, such as tax incentives, sustainable financing options, and easier access to funding to encourage better adoption of sustainability.
They are also seeking training programs to reskill employees on sustainability initiatives, which are vital for attracting investment and fostering growth.