A RECENT survey has revealed that Malaysia’s small and medium enterprises (SMEs) are cautiously optimistic about the economy but are worried about rising costs, weak demand and talent shortage.
According to the SAMENTA SME Outlook Survey 2025/26, powered by Ipsos, while 65% of SMEs believe Malaysia’s economy is on the right track and 91% expect stable or higher revenues in the next six months, the majority face rising costs, weak domestic demand, talent shortages, and escalating compliance burdens that could derail growth.
“SMEs are cautiously optimistic about the economy, but optimism alone will not move the needle. Seven in ten SMEs have less than six months’ cash reserves, and 40% say inflation is their biggest headache,” commented SAMENTA national president Datuk William Ng.
“Without targeted policies to bridge financing gaps, cut regulatory overload and boost demand, we risk a K-shaped economy where larger companies and the GDP show strong growth, but our SMEs continue to struggle.”
Ng expressed gratitude for the government’s strong support for SMEs and welcome ongoing fiscal and labour reforms, but stressed that many SMEs are struggling to cope with the rapid pace of changes—from tax and subsidy rationalisation to labour mandates and ESG compliance.
“Unless proportionality is applied in rolling out these reforms, we risk wiping out our SMEs and undoing years of hard-won gains,” he added.
Meanwile, Ipsos Strategy APAC regional head Kiranjit Singh noted that the survey findings reveal both opportunities and vulnerabilities.
“Slightly more than half of SMEs plan to increase investments over the next six months, and 69% will adjust prices to cope with higher costs,” he remarked.
“This shows intent to grow. But the picture is uneven, with older, urban SMEs better prepared, while younger and East Coast firms remain vulnerable.”
According to the survey, 70% SMEs have less than six months’ cash reserves, leaving them exposed to shocks, while 40% cite inflation as their top challenge, followed by weak demand (33%) and regulatory pressures (26%).
Meanwhile, 74% SMEs have training plans but noted that digitalisation and ESG adoption remain slow.
The survey further pointed out that SMEs in Selangor, Kuala Lumpur, Johor, and Penang have a more optimistic sentiment while East Coast firms remain cautious.
“The survey is an urgent call to act. We cannot rely on headline economic numbers alone, as they mask what’s really happening on the ground,” SAMENTA’s Ng said.
“If we want SMEs to contribute to 50% of GDP by 2030 as outlined in the 13th Malaysian Plan, we must accelerate digitalisation, support the green transition, uplift our talent pipeline and make financing more equitable.” ‒ Sept 18, 2025
Main image: Malay Mail
