Swedish companies are optimistic about the prospects in Malaysia, survey shows
KUALA LUMPUR (September 26): Many Swedish companies are optimistic about the overall economic outlook in Malaysia, with expectations of increased turnover and plans to increase their investments in the country over the next 12 months, according to a survey contributed by Team Sweden.
Team Sweden consists of the Swedish Trade and Invest Council (called Business Sweden in Malaysia), the Swedish Embassy in Malaysia and the Malaysian-Sweden Business Association (Masba).
Of the 41 companies that completed the Malaysia Business Climate Survey 2022, which was conducted in the second and third quarters of this year, 80% of respondents expect turnover to increase as business resumes.
The survey report was launched on Monday (September 26) by Team Sweden, represented by Sweden’s ambassador to Malaysia, Dr. Joachim Bergstrom; Sweden’s Trade Commissioner in Malaysia, Trade and Investment Council, Emma Broms; and Masba’s president Carl Malmqvist.
The report noted that 54% of companies expect to increase their investments slightly or significantly, compared to 39% in the previous survey conducted in 2020.
“Only 10% of companies plan to reduce investment, compared to 14% previously. This is a strong sign of confidence in Malaysia and shows that despite the effects of Covid-19, Malaysia will continue to be an attractive destination for Swedish companies to invest and grow in Asia,” the report says.
It noted 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 loss-making companies has decreased from 20% in 2019 to 7% in 2021,” the report said.
Most respondents have a neutral or positive view of the current business climate in Malaysia, with 46% “neutral” and a further 44% perceiving the climate as “good” or “very good”.
Comparably, the number of companies expressing that the business climate is “bad” or “very bad” decreased to 7% in 2022, from 11% in 2020.
About 53% of companies responding 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 companies in Malaysia still focus 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 skeptical of the possibilities. Several respondents stated that they have not yet explored the region, but that they see the growth and need to begin developing a presence soon,” the report states.
This report also highlighted that Swedish companies perceive “personal security”, “access to distributors” and “service providers” as important advantages of doing business in Malaysia.
“However, the problems and challenges highlighted in the 2020 survey remain today. The lack of transparency, unsatisfactory labor market regulations and finding qualified labor locally continue to be a major struggle for Swedish companies present in Malaysia,” it added.
A number of companies expressed concern about the possibility of bringing in specialized personnel from abroad.
“It is noteworthy that the companies that experienced difficulties in bringing in specialized personnel from abroad were also more likely to respond that they would not invest more in Malaysia, suggesting that improved visa arrangements would go a long way in attracting more Swedish investment,” the report said.
Some 77% of companies surveyed said they had not experienced bribery or fraud, and 86% said they had not seen any human or labor rights abuses.
In total, there are about 90 Swedish companies based in Malaysia.
In his presentation, Trade Commissioner Brooms said that Swedish exports to Malaysia amounted to USD 400 million in 2021, while Malaysian exports to Sweden reached USD 600 million.