Chinese businesses see gloomy Malaysian economy for next two years

(Malay Mail Online) – Malaysia’s economy is set to be downcast until 2016, according to a survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) announced today.

An overwhelming number of respondents (87 per cent) expect the ringgit to continue to slide against major currencies, and almost all of them expect this to affect their business.

Furthermore, 85 per cent of respondents expect the drop in world prices of commodities to significantly damage the Malaysian economy.

Seventy per cent of respondents also complained of rising costs of doing business, and 43 per cent said they expected to face significant business difficulties in the future.

Respondents to the survey reported weaker results in the second half of 2014, including slight declines in sales performance and new orders from overseas markets, and a drop in capacity utilization levels.

As such, more respondents are planning to reduce investments in new resources, the survey said.

The causes most commonly cited for this decline in business performance were government policies, domestic competition, increase in operating costs and the prices of raw materials, and a manpower shortage.

In light of all these factors, the Chinese business community expects the next two years to be challenging.

“Overall, the Chinese business community is generally more pessimistic about the economic outlook for Malaysia for 2015 and 2016,” the survey concluded.

The survey was conducted among 364 local Chinese businesses.

The respondents to the survey comprised 24.2 per cent wholesale and retail, 16.8 per cent manufacturing, 16.5 per cent professional and business services, 8.8 per cent construction, 8 per cent real estate, 4.9 per cent finance and insurance, and 20.8 per cent others. 15 per cent of respondents were considered large companies, and 85 per cent small-medium enterprises.

The ACCCIM is the national level organization of Malaysia’s Chinese chambers of commerce. It comprises 17 constituent members located across the country’s 13 states.