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How Do Malaysian Businesses Feel About The Current Business Outlook?
As global and regional economies continue to evolve, businesses in Malaysia are adapting to new market conditions [1] while remaining focused on growth and resilience. Despite ongoing economic uncertainties, many businesses are optimistic about their prospects, leveraging digital tools and exploring new markets to drive profitability. However, rising operational costs, inflation, and funding limitations present significant challenges. Understanding these trends can help business owners make informed decisions about their strategies moving forward.
To better understand these challenges and opportunities, the UOB Business Outlook Study 2024 [2]surveyed over 525 business owners and key executives from SMEs and Large Enterprises in Malaysia. The study provided valuable insights into business sentiment, overseas expansion, digitalisation, and sustainability, shedding light on how businesses were navigating these critical areas at the time.
Here are the key takeaways from the study:
1. Overall business sentiment
While 3 in 10 businesses believe the current business environment is very positive, many are grappling with rising operational costs, high inflation, and economic slowdown. Nearly 4 in 5 businesses in the region report being impacted by rising operational costs, while over 3 in 10 are feeling the strain of inflation. These financial pressures present significant challenges for businesses trying to maintain profitability and long-term growth.
2. Overseas business expansion
With profitability and revenue growth as top priorities, nearly 8 in 10 Malaysian businesses are considering overseas expansion. The industries showing the highest interest include Industrials, Oil & Gas (90%) and Manufacturing & Engineering (85%). Cross-border digital trade platforms are emerging as a preferred method, with almost 8 in 10 businesses showing interest in leveraging these tools.
3. Digital adoption
The digital transformation of businesses in Malaysia is well underway, with nearly 8 in 10 businesses having adopted digitalisation across multiple departments. Over half of these businesses report considerable or great success with their digital efforts. The most impacted sectors include:
- Higher productivity and efficiency: Business Services (48%), Real Estate & Hospitality (48%)
- Improved profitability: Wholesale Trade (44%), Business Services (43%)
Digitalisation continues to be a key driver of competitiveness, helping businesses streamline operations and enhance overall efficiency.
4. Sustainability adoption
Sustainability is gaining importance among Malaysian businesses, with 83% recognising its significance. However, only 39% have implemented sustainability measures. The primary obstacles include increased costs (32%), lack of knowledge (32%), and inadequate infrastructure (30%). The sectors most concerned about cost increases are Industrials, Oil & Gas (45%) and Manufacturing & Engineering (42%).
UOB: A Trusted Banking Partner for SMEs
Given these challenges and opportunities, having a reliable banking partner is crucial. UOB offers tailored solutions to help SMEs achieve their business goals, from securing financing to adopting digitalisation strategies. Whether it's expanding overseas[3], improving operational efficiency through digitalisation[4], or implementing sustainability initiatives[5], UOB provides comprehensive banking solutions that empower SMEs to navigate the evolving business landscape with confidence.
For SMEs looking to grow and thrive, UOB stands as a strong financial partner, ready to support their journey toward success. Get in touch with UOB today to explore business banking solutions tailored to your needs.
[1] Malaysia's financial institutions supportive of economic growth as households, businesses stay resilient — BNM (The Edge) https://theedgemalaysia.com/node/728907
[2] UOB Business Outlook Study Malaysia (2024)https://www.uobgroup.com/asean-insights/articles/uob-business-outlook-study-2024-malaysia.page
[3] UOB Trade Solutions https://www.uob.com.my/business/trade/index.page
[4] UOB Smart Business https://www.uob.com.my/business/digitalise/index.page
[5] UOB Decarbonisation Solutions For SMEs https://www.uob.com.my/business/finance/esg.page
