Services the largest portion of approved investments
While Malaysia has been lobbying for increased market access through bilateral and multilateral trade agreements, Mustapa reaffirmed that the government will still continue to place emphasis on protecting the interests of the Malaysian economy and her citizens.
“We continued our efforts in developing the industrial ecosystems in the country and encourage domestic players to move up the value chain.
“To thrive in today’s challenging and fast-paced business climate, we must stay ahead of the game, and continue to expand and diversify our trade with the world,” the Minister concluded..
Overviewing the current state of investments in Malaysia, the services sector saw the largest portion of approved investments, contributing RM108.4 billion or 71.9 per cent, followed by the manufacturing sector with investments of RM40.7 billion or 27.0 per cent, and the primary sector with approved investments of RM1.7 billion or 1.1 per cent.
Within the services sector, the total number of projects approved in 9M16 saw a decline of 3.9 per cent to 3,203 as compared to 3,334 in 9M15. In spite of this, the value of investment saw an increase of 26.2 per cent y- o-y.
In the manufacturing sector, total approved manufacturing investment had actually bounced back into a growth of 15.8 per cent y- o-y to RM21.1 billion in the third quarter of 2016 (3Q16), following a decline of 32.2 per cent to RM10.7 billion in 2Q, and compared to - 73.6 per cent of RM8.9 billion in 1Q.
R HB Research noted that this recover in 3Q was reflective in the rebound of domestic manufacturing investment approvals that saw a gain of 0.9 per cent y- o-y, after falling by 59.5 per cent in the previous quarter, while foreign direct investment (FDI) picked up to 66.6 per cent yo-y during the quarter, from + 0.8 per cent in 2Q.
For 9M16 period, manufacturing approvals saw a decrease of 39.0 per cent y- o-y, mainly due to two lumpy projects approved last year, namely, Petronas Refinery and Petrochemical Corp’s ( PRPC) project in Johor and Petronas LNG 9 Sdn Bhd’s ( LNG9) project in Sarawak.
“Without these two lumpy projects, the performance of the manufacturing sector actually shows an overall increase of 25.6 per cent from RM32.4 billion in 9M15,” stated MIDA.
Next the primary sector saw total investments worth RM1.7 billion in 9M16.
The sector comprises three main segments, namely, agriculture, mining, and planation and commodities. Investments by foreign sources totalled RM0.7 billion while domestic investments contributed RM1 billion.