KUALA LUMPUR, Aug 21 — Members of the Federation of Malaysian Manufacturers (FMM) remained cautious on the business activities outlook for the second half (H2) 2019 due to external factors such as the US-China trade tensions and Brexit.
Citing the results of a survey released today, FMM president Datuk Soh Thian Lai said only 29 per cent of the 509 respondents projected a pick-up in business activities in H2 2019, while the remaining 71 per cent thought otherwise.
“In addition, only 25 per cent of the respondents expected export and local sales to increase in H2 2019,” he said at the media briefing in conjunction with the release of FMM- Malaysian Institute of Economic Research (MIER) Business Conditions Survey for First Half of 2019 (H1 2019) here, today.
He also said, 43 per cent of them foresee an increase in their cost of production soon.
The survey was carried out from June 4 until July 28, 2019, with the participation of 509 FMM members nationwide.
On ways to improve the business outlook, Soh said, 45.8 per cent of the respondents hoped the European Union (EU) -Malaysia free trade agreement could be concluded as soon as possible, as thus far, only Singapore and Vietnam were the two countries in the region that have inked similar deals with the EU.
He also said up to 40.7 per cent of the respondents think Malaysia should conclude the Regional Comprehensive Economic Partnership (RCEP).
RCEP is a proposed free trade agreement between 10 ASEAN member countries and six Asia Pacific nations, namely Australia, China, India, Japan, South Korea and New Zealand.
“While 25.3 per cent of them hope the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) should be signed,” said Soh of the revised pact (CPTPP) which was signed by the remaining 11 TPP member countries including Malaysia on March 8 this year.
Currently, Malaysia and three other countries namely Brunei, Chile and Peru have yet to ratify the agreement.
On the bright side, Soh said 34 per cent of the respondents have embraced the Industrial 4.0 by implementing automation in H1 2019, while 33 per cent of them are considering it.
Meanwhile, on efforts to improve productivity, 74 per cent of the respondents had adopted training and upskilling, while 71 per cent had upgraded machinery and equipment, he said.
He believed the initiatives could further enhance the country exports to surpass the RM1 trillion marks soon, given that the total export had reached RM998 billion last year.
On the 2020 Budget wishlist, 16 per cent of the respondents were looking forward to the deductions in general tax incentives, while 15 per cent hoped to see a clearer foreign workers policy.
“10 per cent of them hoped the sales and service tax (SST) issue, such as the exemption of raw materials, could be addressed in the upcoming budget,” said Soh.
The 2020 Budget is slated to be tabled in the parliament on Oct 11 this year. — Bernama
Source: The Malay Mail Online