Malaysia’s SMEs optimistic about economic outlook

Small and medium-sized enterprises (SMEs) both in Malaysia and overseas say they are optimistic about the country’s business landscape and prospects, according to the UOB Business Outlook Study 2024.

The annual study revealed that Malaysia has emerged as the most important country for businesses located in the ASEAN bloc over the next three years. The survey found large enterprises were also optimistic for the future.

UOB Malaysia chief executive officer Ng Wei Wei said the study shows that local businesses are gearing up for growth and are bullish on Malaysia’s economic potential, while overseas businesses are looking to expand into the country.

She said: “This is due to Malaysia’s strong economic fundamentals and attractiveness as a regional business hub… and the rising adoption of sustainability among businesses and states.

“UOB Malaysia remains committed to supporting the growth of local businesses and facilitate more foreign direct investments and trade into the country.”

Now in its fifth year, the study surveyed more than 4,000 SMEs and large enterprises across seven markets, including over 500 Malaysian businesses.

The survey seeks to understand the business outlook and key expectations among SMEs and large enterprises in Malaysia, Hong Kong, Indonesia, mainland China, Singapore, Thailand and Vietnam.

Among the key findings of the survey, more than seven in 10 Malaysian organisations polled said they 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 industrial, oil and gas (90%), and manufacturing and engineering (80%).

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.

The report stated: “Almost 80% of Malaysian businesses want to expand overseas to boost their profits, grow revenue and build their reputation as international businesses.

“Businesses also want to incorporate sustainability practices into their operations to attract investors, collaborate more easily with multinational corporations with sustainability goals, and improve their brand and reputation.”

The UOB study reported that businesses want to incorporate sustainability practices into their operations because it helps to attract investors, make it easier to work with multinational corporations with sustainability goals in place and improve the brand and reputation of the company.

More than 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%), followed by industrial, oil and gas (45%) and community and personal (40%).

 

Cashless is coming to Malaysia

Malaysia is moving towards becoming a cashless society, with the country expected to be completely cashless by 2030.

A recent survey by Visa found that technology is changing how people pay for goods and services, and said there “is a need to ensure good mobile connectivity, ubiquitous and seamless consumer experiences as well as inter-operability in order for more consumers to use electronic payments in their daily lives”.

Visa says increased connectivity, coupled with the wider payment methods and form factors, have transformed consumers’ experiences.

Its report said: “These technologies have enabled consumers to perform device-initiated payments anywhere at any time with their smartphones, and are fast becoming the norm as a more seamless, reliable and secure mode of payment.”

It also said that South-East Asia is making ‘remarkable strides’ toward a cashless society.

It commented: “As consumers become more digitally savvy, they are also more open to using alternative methods of transacting with their peers. Almost three-quarters (73%) of respondents in South-East Asia are aware of peer-to-peer (P2P) payment methods, a spike compared with 67% in 2016.

“Across the region, respondents in Thailand (86%), Philippines (81%) and Singapore (75%) have relatively higher levels of awareness of P2P services.”

It also noted that the flexible and low-cost nature of QR-based payments has helped drive adoption for this solution in the region.