German and Japanese companies have expressed a positive outlook on Malaysia’s economic performance and business sentiment for the upcoming year, as surveys have shown.
According to the AHK World Business Outlook Fall 2024 survey – conducted with 111 members from the Malaysian-German Chamber of Commerce and Industry (MGCC) –the findings illustrate a strong confidence among German companies that are operating in Malaysia, highlighting a positive trajectory for business development and economic growth in the coming year.
MGCC executive director Jan Noether said German companies are comfortable and committed to the Malaysian market, with a clear outlook for continued success and expansion in the year ahead.
“The strong sentiment and optimism reflected in the survey highlight the positive situation we are experiencing here and underscore our confidence in Malaysia’s economic stability and growth prospects.
“Moreover, Malaysia’s stable economic environment and supportive policies play a key role in stimulating further investment, reinforcing our belief in the country as a reliable and attractive hub for business growth,” he stated.
From the survey, 92% of German businesses in Malaysia reported conditions as ‘good’ or ‘satisfactory’ which marks a significant increase of 10% compared to the same period in 2023.
The strong economic development and confidence among German businesses in Malaysia are expected to continue this year, with 97% of respondents describing the outlook for 2025 as favourable or stable.
“While Malaysia has always been recognised for its strong economic foundation, 2024’s results demonstrate a significant boost in confidence, surpassing expectations from 2023’s outlook and highlighting the continued resilience of Malaysia’s economy.
“Reflecting this confidence, over 63% of companies expect positive business development over the next 12 months, while 35% anticipate the current stability will be maintained,” the report noted, adding that only 1.8% predict a decline in performance, showcasing a predominantly positive outlook for 2025.
Meanwhile, based on another survey – the Financial Year 2024 Survey by the Japan External Trade Organisation Kuala Lumpur (JETRO) – it showed that business sentiment among Japanese companies in Malaysia has improved for the fourth consecutive year, even as competition intensifies.
In a statement, the organisation said that Malaysia’s profitability rate exceeds the ASEAN average, with the expected operating profit margin for 2024 at 70.8% and the nation stands out as the only major ASEAN country to record consistent growth over the past four years.
In the survey, 48.9% of the companies plan to promote local human resource development and employment and are mulling on expanding their business in the post-COVID-19 era.
“The operating profit outlook for 2025 shows that the percentage of companies expecting an improvement has increased in all countries compared to 2024, with Malaysia’s forecast showing a slight increase to 41.9%.
“In the post-COVID-19 era, Malaysia has outperformed other major countries in several initiatives – local human resource development (58.8%), employment increase (35.8%) and the promotion of decarbonisation (24.9%),” it said.
The survey also revealed that the percentage of companies considering business expansions in the next one to two years remains at 48.9%.
Additionally, over 70% of the respondents are concerned about rising labour costs and high employee turnover is the most serious problem among major ASEAN countries.
It also found that inflation-related cost increases will affect supply chain management, leading to the transfer of electrical and electronics (E&E) production to Malaysia.
Additionally. 83.5% of companies responded that they are either already working on or planning to take on decarbonisation efforts.
