Malaysia’s Strong Investment Performance Signals Nation On The Road To Recovery

Malaysia Records RM107.5 Billion of Approved Investments in January – June 2021

Guided by the National Investment Aspirations and National Recovery Plan, Malaysia continues to attract high-value and high-tech investments despite the global economic moderations due to the COVID-19 pandemic.

For the period of January – June 2021 (1H 2021), Malaysia recorded a robust investment performance of RM107.5 billion in total approved investments in the manufacturing, services and primary sector. This reflects a surge of 69.8 per cent from the same period last year (RM63.3 billion). These approved investments involved a total of 2,110 projects and are expected to generate 44,994 job opportunities. Foreign direct investments (FDI) approved for 1H 2021 soared by 214.9 per cent compared to 1H 2020 whereby more than 58.1 per cent or RM62.5 billion of the total approved investments were from foreign sources, signaling the confidence of foreign investors in the country’s stable and conducive economic climate and business ecosystem. Singapore, Republic of Korea and the Netherlands were the top three (3) countries of foreign investment sources in Malaysia’s economic sectors.

Domestic investments remained healthy during the 1H 2021, representing the remaining RM45.0 billion of the total approved investments. Notably, while FDI dominated the manufacturing sector, investments from Malaysian companies led in the services and primary sectors.

Malaysia: An Attractive Manufacturing Hub in ASEAN

Malaysia’s strategy of positioning the country as a viable investment destination and alternative supply chain hub in ASEAN, particularly for manufacturing operations, showed inspiring results. A total of 367 manufacturing projects worth RM66.9 billion were approved in 1H 2021, compared to RM36.4 billion approved in the same period last year.

These approved manufacturing projects are expected to create 32,220 job opportunities in various managerial, technical and skilled crafts positions.

This emphasis on creating quality jobs for Malaysia reflect the higher value chain transition of the manufacturing sector.

The leading sources of approved foreign investments in the manufacturing sector were Singapore, Republic of Korea and the Netherlands. These countries jointly accounted for more than 90 per cent or RM53.0 billion of the total RM58.2 billion foreign investments approved in the manufacturing sector for January – June 2021.

In terms of recipients of approved investments in the manufacturing sector,the states of Kedah, Selangor, Sabah, Perak and Johor registered the highest level of investment. Collectively, these states contributed 88.9 per cent or RM59.5 billion to the total approved investments. When implemented, these investments will create 25,024 job opportunities in the states, making up nearly 78 per cent of the total employment in the manufacturing sector.

Services Sector Striding Ahead with Easing of Economic Restrictions

The investments approved in the services sector for 1H 2021 recorded an increase of nearly 30 per cent compared to the same period in 2020. A total of 1,717 services projects are expected to create more than 12,400 job opportunities. Domestic investments made up the larger portion, recording RM31.9 billion or 93.6 per cent of the total approved investments for the sector during this period while the remainder, RM2.2 billion were from foreign sources.

The real estate sub-sector remains as the largest contributor with RM14.9 billion, recording a 20.6 per cent increase from the corresponding period last year.

Following the restriction and subsequent easing of restrictions on economic activities, the services sector saw a significant improvement, recording increases in approved investments during 1H 2021. The distributive sub sector, which include wholesale and retail investments, in particular, recorded a significant rise of 395.1 per cent in approved investments to RM1.9 billion from RM0.4 billion in the corresponding period in 2020.

Approved investments for global establishments also saw an increase of 218.7 per cent. A total of 46 projects proposing to make Malaysia their regional or global operation hubs were approved in 1H 2021.

These activities will position Malaysia on course for greater integration into the global supply chain.

Malaysia’s Primary Sector: Above External Shockwaves

Given the volatility of global commodity prices and supply chain disruptions, the investment in Malaysia’s primary sector continued to thrive. The sector contributed RM6.5 billion or 6.1 per cent to the total approved projects in January – June 2021. The mining subsector continued to lead with approved investments of RM6.4 billion, followed by plantation and commodities with RM79.8 million and agriculture with RM11.5 million. These investments are expected to create 278 job opportunities.