According to the UOB Business Outlook Study 2024 (SMEs & Large Enterprises), businesses in Malaysia are optimistic about the country’s growth prospects. Malaysia has also emerged as the most important country that businesses in ASEAN and Greater China want to venture into in the next three years.
The annual study, now in its fifth year, surveyed more than 4,000 SMEs and large enterprises across seven markets, including over 500 Malaysian businesses. The survey aims to understand the business outlook and key expectations among SMEs and large enterprises in Malaysia, Hong Kong SAR, Indonesia, Mainland China, Singapore, Thailand, and Vietnam.
Ng Wei Wei, CEO, UOB Malaysia, said, “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 while overseas businesses are looking to expand into Malaysia.
“This is due to the country’s strong economic fundamentals and attractiveness as a regional business hub driven by the China+1 strategy, the upcoming Johor-Singapore Special Economic Zone, the upcycle of the global semiconductor industry, and rising adoption of sustainability among businesses and states.
“UOB Malaysia remains committed to leveraging our extensive regional network, strong sector expertise, and local market knowledge to support the growth of local businesses and facilitate more foreign direct investments and trade into the country.”
Key Findings
Bullish on Malaysia:
The survey found that more than seven in 10 Malaysian businesses are positive about the current business environment, with 76% expecting business performance to improve this year. The sectors most positive about the current business environment are industrials, oil and gas (90%), and manufacturing and engineering (80%). Seven in 10 businesses also expect to see revenue growth each year over the next three years. However, many businesses are still recovering from the overall economic slowdown and are mindful of the impact of inflation and higher operating costs.
Venturing Overseas as Part of Growth Plans:
The survey also showed that the top three priorities for local businesses in the next one to three years are reducing costs, adopting digital solutions to improve productivity, and sourcing new customers.
Almost 80% of Malaysian businesses want to expand overseas to boost their profits, grow revenue, and build their reputation as an international business. In particular, these businesses highlighted ASEAN and Mainland China as the top two markets they want to expand into within the next three years. Within ASEAN, Indonesia is the most important country that local businesses want to venture into, followed by Singapore, Thailand, and Brunei.
Sustainability Imperative to Attract Investors:
The survey reported that businesses wanted to incorporate sustainability practices into their operations because it helps attract investors, makes it easier to work with multinational corporations with sustainability goals in place, and improves the brand and reputation of the company.
Over eight in 10 local businesses believe that sustainability is important, but only 39% have implemented sustainability practices. Leading the charge is the manufacturing and engineering sector (53%), which has incorporated the most sustainability practices into its business, followed by industrial, oil and gas (45%), and community and personal (40%).
To ensure better adoption, companies are requesting more financial support in the form of tax incentives/rebates, sustainable financing options, and easier access to funding or grants. Additionally, companies are looking for training programs to reskill or upskill employees to address concerns around sustainability and help businesses identify and execute the right sustainability initiatives.
For a copy of the full insights from the UOB Business Outlook Study 2024 (SMEs & Large Enterprises), please visit here.
