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Some 56.3% of Japanese manufacturers recovered to above pre-Covid level

Some 56.3% of Japanese manufacturers recovered to above pre-Covid level

07 Apr 2022

The survey sample involved 174 Japanese companies in Malaysia and was conducted online from Jan 19 to Feb 18 this year

About 56.3% of Japanese manufacturing companies in Malaysia have recovered operational activities to above pre-Covid levels, according to the Japan External Trade Organisation (Jetro) Kuala Lumpur and the Japanese Chamber of Trade and Industry Malaysia (Jactim) survey.

Some 43.7% of Japanese non-manufacturing companies in the country stated their business performance at present is at the same levels as the pre-Covid-19 period.

“Operation at roughly half of the nonmanufacturing companies still had not recovered to pre-Covid-19 levels,” Jetro and Jactim said in a report on Tuesday.

The survey sample involved 174 Japanese companies in Malaysia and was conducted online from Jan 19 to Feb 18, 2022.

It saw a clear difference between manufacturing and non-manufacturing on operational issues.

“For manufacturing, worker shortage stood out at 66.3%, followed by logistics disruption issues such as late delivery of products or parts or raw materials, sea and air freight issues including space, higher fees and delay.

“For non-manufacturing, the hindrance was the restriction on in-person activities such as restriction on sales activities in Malaysia like visiting clients,” the statement noted.

The impact of the floods in parts of Malaysia at the end of 2021 continues with some respondents stating their suppliers are still suffering from some damage.

“As a countermeasure to avoid supply chain issues, some had changed their domestic raw materials or parts suppliers,” it noted. The survey found that investments continue to be on an expansion trend for both manufacturing and non-manufacturing companies at roughly 20%.

The respondents stated they continue to expand due to the companies’ shifting to the high-value product, changing needs on the back of the growing middle class, higher English proficiency and education level as well as lower costs here compared to Singapore.

According to the respondents, Malaysia’s main attraction as a mediumto long-term investment destination was due to the level of English proficiency of its workers and citizens, the country’s safety and security as well as a good living environment.

The companies, however, had issues with the complicated visa application process, political uncertainty and frequent changes in its regulation.

On labour matters, the main issues with the sample surveyed were the rise in wages, various expatriate employment and foreign worker policy matters.

“Duration and complexity of employment pass application process for expatriates continued to be an issue,” the release revealed.

Regarding the foreign worker policy, the survey saw about 60% of manufacturing companies wanted to hire new workers.

“In particular, the manufacturing sector wants hiring of new workers to resume in light of the serious foreign worker shortage,” it further said.

The respondents also requested a standardised government announcement method and provision of releases in English.

Source: The Malaysian Reserve

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