MALAYSIA remains an attractive investment destination for global and regional business expansions as total Foreign Direct Investments (FDI) and Domestic Direct Investments (DDI) continued to grow this year.
This after the country attracted a total of RM123.3 bil worth of approved investments in the manufacturing, services and primary sectors involving 1,714 projects in the first half of the year (1H 2022) from January to June 2022.
In turn, 57,771 job opportunities are expected to be created, the Government’s principal investment promotion and development agency, the Malaysian Investment Development Authority (MIDA), said in a statement announcing the matter.
FDIs remain the major contributor during 1H 2022, at 70.9% or RM87.4 bil, while investments from domestic sources contributed 29.1% amounting to RM35.9 bil.
The services sector also assumed a significant role in driving the country’s economic recovery, accounting for 63.3% of total approved investments with RM78.0 bil.
The “stellar” performance for the services sector exceeded expectations for January to June 2022, an increase of 48.8% from the achievement attained in the same period in 2021, followed by the manufacturing sector at RM43.1 bil or 34.9% and the primary sector at RM2.2 bil or 1.8%.
FDIs accounted for 70.9% of the approved investments, valued at RM87.4 bil, of which China dominated, with investments totalling RM48.6 bil, followed by Germany (RM9.0 bil), Singapore (RM6.0 bil), Brunei (RM5.1 bil) and The Netherlands (RM4.1 bil).
For projects approved by state, five major states, namely Johor, Selangor, Sabah, Kedah and Pulau Pinang, contributed RM103.5 bil or 83.9% of the total investments approved from January to June 2022.
Services sector
During 1H 2022, the services sector accounted for the largest share of the total approved investments, amounting to RM78.0 bil from 1,351 projects which contributed to the growth of the country’s economy through the creation of 22,569 new jobs.
This is a significant increase as compared to the RM52.4 bil investments approved for the services sector in the same period last year.
Based on the total approved investments for 1H 2022, foreign investments made up the largest portion, recording RM50.4 bil or 64.6% of the total approved investments for the services sector, while the remaining 35.4% or RM27.6 bil were from domestic sources.
In terms of top-performing sub-sectors for the period, the information and communications sub-sector dominated the services sector, with approved investments valued at RM53.7 bill or 68.8%. From the total approved investments of this sub-sector, three data centre projects were approved with investments totalling RM51.1 bil or 95.2%.
Among other performing sub-sectors which contributed to the significant amount of investments approved were real estate (RM11.0 bil), utilities (RM4.8 bil), distributive trade (RM2.1 bil) and hotels and tourism (RM1.8 bil).
Manufacturing sector
During 1H 2022, the manufacturing sector accounted for RM43.1 bil or 34.9% of the total approved investments in various economic sectors, as compared to RM75.8 bil for the same period in 2021.
Of the total approved investments in 1H2022 for the manufacturing sector, FDIs amounted to RM35.5 bil or 82.4%, while domestic investments contributed to the remaining RM7.6 bil or 17.6%.
From the RM43.1 bil worth of approved investments in the manufacturing sector, investments for expansion or diversification projects showed positive development with an increase of 31.9% totaling RM26 bil for 1H 2022 as compared to the same period in 2021.
The remaining RM17.1 bil was recorded from new projects.
A total of 35,032 potential job opportunities are expected to be created in the manufacturing sector, requiring 1,745 (5%) managerial positions and 4,122 (11.8%) professional or technical and supervisory roles, such as engineers in the field of E&E, mechanical, chemical and other disciplines.
Primary sector
The primary sector, meanwhile, recorded a total of RM2.2 bil worth of approved investments (1.8%) of the total approved investments in the various economic sectors from 1H 2022, as compared to RM6.5 bil worth of approved investments for the same period in 2021.
FDIs dominated the primary sector with investments valued at RM1.5 bill (68.2%), while the remaining RM0.7 bil (31.8%) was contributed from domestic sources.
Two sub-sectors showed significant growth, namely agricultural (recording a 1,500% increment in total approved investments to RM184.7 mil) and plantation and commodities (amounting to a 36.6% increase to RM109.1 mil). – Sept 3, 2022
Main photo credit: The Malaysian Reserve
