Low labour costs, strong supplier network and skilled workforce continue to attract foreign investors
 
KUALA LUMPUR, Nov 16 (Bernama) – German companies will continue to grow their presence in Malaysia, further reinforcing the two countries’ robust trade relations despite a gloomy global economic outlook that has been forecasted for 2023, according to the latest AHK World Business Outlook Fall 2022 survey results.

In the face of global headwinds including supply chain bottlenecks, the XBB Covid-19 variant and the Russia-Ukraine war, 50% of German firms in Malaysia surveyed said they will increase spending on local investments to develop their businesses.

54.2% expect to raise headcount in 2023, which bodes well for job seekers in the face of a possible economic downturn.

German companies named three advantages of doing business in Malaysia – low labour costs (65.2%), supplier network (60.9%) and the availability of skilled workers (56.5%).

To address the ongoing global supply chain disruption, 65.2% have rolled out plans to look for new or additional suppliers. 81% said Asia Pacific (excluding China) was their first choice for new suppliers while 61.9% preferred to look within Malaysia.

Companies preferred to source from within the region and domestically because of cost reasons (76.2%) and also allows them to diversify or minimise risk in the event of failures (61.9%). This trend in multi-sourcing can be attributed to the supply and demand shocks due to the pandemic and Russian invasion of Ukraine as a way of developing a resilient supply chain strategy.

Additionally, 50% of German companies preferred to remain here when asked which regions they have looked at to move their operations to.

Daniel Bernbeck, Executive Director of the Malaysian-German Chamber of Commerce and Industry (MGCC) said, “The AHK World Business Outlook survey results continue to demonstrate that Malaysia has plenty to offer German companies including an investor-friendly environment, skilled workforce and a broad and strong supplier network.”

“It is promising to see an indication of job creation and preparedness to increase expenditure to grow their presence in the country – these signal strong recovery and resilience after two years of disruptions due to the Covid-19 pandemic.

“As representatives of German industry and trade in Malaysia, we are happy to hear that these companies are planning long-term in Malaysia and this confidence from foreign investors will facilitate economic growth that will further propel Malaysia’s position as an ideal place of doing business in the region,” he added.

Companies said labour shortages (58.3%), rising commodity prices (54.2%) and supply chain disruptions (50%) were their main concerns.

66.7% of companies expect the economic situation to stay the same in 2023.

The AHK World Business Outlook is based on a regular DIHK survey of member companies of the German Chambers of Commerce Abroad, Delegations and Representative Offices (AHKs).

SOURCE: Malaysian-German Chamber of Commerce and Industry (MGCC)

FOR MORE INFORMATION, PLEASE CONTACT: 
Name: Melanie Chalil 
Communications & PR Manager 
Tel: +6012 223 6976
Email: melanie.chalil@malaysia.ahk.de