KUALA LUMPUR – Malaysian businesses remain confident and are optimistic about the benefits and opportunities for international trade. This is despite difficulties such as the resurgence of Covid-19, the decline in consumer demand and protectionism.
Additionally, these difficulties and the events of 2020, has not dampened the inclination of most Malaysian businesses to invest to grow. These were some of the findings of HSBC’s global survey on 1 December.
This latest report gauges business sentiment and expectations on trade activity and business growth, surveyed more than 10,000 companies across 39 markets in the world, including Malaysia.
The survey data reflects that overall, Malaysian businesses are more positive than their regional peers and are coping relatively well with the current challenges – the proportion of Malaysian businesses (74%) projecting growth over the next year is also well above the average for APAC (60%).
The survey also reveals that around three quarters (76%) of Malaysian businesses expect to return to pre-Covid profitability levels by the end of 2022, while a minority of less than one in ten (6%) say that they are already ahead of their own pre-Covid levels. The top three drivers of business growth include increased domestic demand, expanding to new digital platforms and channels and introducing new products and services.
This positive outlook is also evidenced by the fact that 78% of Malaysian businesses intend to increase investment in their business in the new year, over the two thirds seen globally.
Companies will focus their investment on three fundamental areas in 2021 – cash flow and capital management, marketing and sales channels. To support these areas, they plan to increase investment in technologies that help target consumers, improve customer experience and promote collaboration.
Given the recent signing (and eventual ratification) of the Regional Comprehensive Economic Partnership (RCEP), we will continue to see an increase in intra-Asian trade, which is already larger than Asia’s trade with North America and Europe combined. This increase will continue to power global economic growth and pull the economic centre of gravity towards Asia.
Nearly all Malaysian businesses (98%) have concerns about their supply chain. The key issues being supply chain instability and increased costs. In response to these issues, 99% of Malaysian businesses have made adjustments to their supply chain.
More than half (57%) of Malaysian businesses are also expecting that reshaping their supply chain will reduce costs. Other benefits include improved supply chain visibility and increased speed to market/moving closer to the end buyer.
Additionally, some of the more popular changes Malaysian businesses have undertaken have been the increased usage of digital technology, diversifying to work with more suppliers and choosing suppliers for their operational resilience and ability to deliver quickly.
According to the survey findings, three fifths of Malaysian businesses will make it their immediate priority in 2021 to focus on usage of digital technology (56% vs. 48% globally). This underpins the importance of digital innovation to businesses in the coming year.
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