SME sector to perform better in second half of 2017

KUALA LUMPUR: The small and medium enterprise (SME) sector is expected to perform better in the second half of 2017 in tandem with the expected upturn in the local economy, said SME Corporation Malaysia Chairman Tan Sri Mohamed Al Amin Abdul Majid.

He said SMEs, which are the backbone of the Malaysian economy, representing 97.3 per cent of total business establishments, were slightly affected this year partly due to declining oil prices and the weakening ringgit.

“However, SMEs have remained resilient and recorded more than one per cent growth.

“This proves that SMEs are able to sustain their business despite the challenges they face,” Mohamed Al Amin told reporters after launching smebusiness.tv yesterday.

He said SMEs growth, supported by consumption and investment activities, increased to 6.1 per cent in 2015 compared with Malaysia’s overall Gross Domestic Product (GDP) growth of five per cent.

Growth for 2016 was projected to expand between 5.0 and 5.5 per cent while the nation’s economic growth was expected to increase between four and 4.5 per cent.

The sector’s overall GDP growth last year rose to 36.3 per cent while the projections for 2016 ranged between 37 per cent and 37.5 per cent.

Mohamed Al Amin also revealed that a number of SMEs have opted to scale down their business operations due to the lack of foreign labour.

“The shortage of foreign workforce has resulted in low productivity especially in the manufacturing sector among SMEs,” he said, adding that this would not be a permanent situation.

Mohamed Al Amin urged SMEs to step-up efforts to penetrate the Asean market following the establishment of the ASEAN Economic Community (AEC) on Dec 31, 2015.

“SMEs should leverage on the AEC platform to enlarge their marketplace and harness business resources,” he added.

The smebusiness. tv, a free online edutainment channel, provides a base for SMEs to exchange information and gather quick business tips. — Bernama