Swedish firms optimistic about outlook in Malaysia, survey shows
27 Sep 2022
Many Swedish firms are optimistic about the overall economic outlook in Malaysia, with expectations of increased turnover and plans to increase their investments in the country in the next 12 months, according to a survey contributed by Team Sweden.
Team Sweden comprises the Swedish Trade and Invest Council (known as Business Sweden in Malaysia), Sweden’s Embassy in Malaysia, and the Malaysian-Sweden Business Association (Masba).
Of the 41 companies which completed the Malaysia Business Climate Survey 2022, being conducted during the second and third quarters of this year, 80% of those polled expect turnover to increase in the wake of a resumption of business activities.
The survey report was launched on Monday (Sept 26) by Team Sweden, represented by Swedish Ambassador to Malaysia, Dr. Joachim Bergström; Trade Commissioner of Sweden to Malaysia, The Swedish Trade & Invest Council, Emma Broms; and Masba president Carl Malmqvist.
The report noted that 54% of companies expect to slightly or significantly increase their investments, compared with 39% in the previous survey done in 2020.
“Only 10% of companies plan to reduce investments, compared to 14% previously. This is a strong sign of confidence in Malaysia and demonstrates that despite the impact of Covid-19, Malaysia will continue to be an attractive destination for Swedish companies to invest and grow in Asia,” said the report.
It observed that Swedish companies experienced higher profitability in 2021, than in 2019.
“66% of the Swedish companies [were] profitable in 2021, compared to 61% in 2019. Similarly, the number of companies operating at a loss has decreased from 20% in 2019 to 7% in 2021,” said the report.
Most respondents have a neutral or positive perception of the current business climate in Malaysia, with 46% “neutral” and another 44% perceiving the climate as “good” or “very good”.
Comparably, the number of companies expressing that the business climate is “poor” or “very poor” decreased to 7% in 2022, from 11% in 2020.
About 53% of the companies that responded to the survey have more than 1,000 global employees.
The respondents come from a wide range of industries. Industrial companies represent the largest sector at 47%, followed by professional services at 38%, and consumer companies at 16%.
While most Swedish businesses in Malaysia remain focused on Peninsular Malaysia and have limited activities in Sabah and Sarawak, two out of three respondents have a plan to grow their business in the two Borneo states.
“Some see great potential in the area, while others are more sceptical of the opportunities. Several respondents stated that they have not investigated the region yet, but that they see the growth and need to start developing a presence soon,” the report said.
This report also highlighted that Swedish companies perceive “personal safety”, “access to distributors”, and “service providers” to be key advantages in doing business in Malaysia.
“However, concerns and challenges highlighted in the 2020 survey remain in place today. The lack of transparency, unsatisfactory labour market regulations, and finding skilled labour locally continue to be big struggles for Swedish companies present in Malaysia,” it added.
A number of companies expressed concerns regarding the ability to bring in specialised staff from abroad.
“It is noteworthy that the companies that experienced difficulties in bringing in specialised staff from abroad were also more likely to respond that they would not invest more in Malaysia, indicating improved visa arrangements would go a long way towards attracting more Swedish investment,” the report said.
Some 77% of the companies surveyed said they had not experienced bribery or fraud, and 86% said they had not witnessed human or labour rights abuse.
In total, there are about 90 Swedish companies based in Malaysia.
In her presentation, trade commissioner Brooms said Swedish exports to Malaysia amounted to US$400 million in 2021, while Malaysian exports to Sweden reached US$600 million.
Source: The Edge Markets