The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) released its Bi-annual “Malaysia’s Business and Economic Conditions Survey (M-BECS)” for the period of January-June 2024 (1H 2024) and expectations for July-December 2024 (2H 2024).

The survey was conducted during the period between 8 May 2024 and 17 July 2024, and has received a total of 661 responses, of which micro, small and medium enterprises (MSMEs) making up 91.2% of total respondents.

Key Summary of the M-BECS Findings
The ACCCIM President Senator Tan Sri Dato’ Low Kian Chuan said that overall, there is a mixed sentiment among responding businesses for 2024 and a general improvement in expectations for 2025.

Businesses are cautious about domestic economic and business conditions. Firms are navigating the complexities of the current global and domestic landscape. They are anxious about the cost implications following the starting of retargeting subsidies rationalisation, the e-invoicing implementation, an impending review of new minimum wage, and the roll-out of multi-tier levy for foreign workers under an increasing business costs environment.

(a)  In 1H 2024, 63.1% of responding businesses have a neutral view on domestic economic conditions. While a majority of them are still holding the same expectations in 2H 2024 and 1H 2025, there is a notable increase in positive sentiment among responding businesses.

(b)  Similarly, a majority of firms have a neutral view of business conditions in 1H 2024 (61.3%), 2H 2024 (54.9%) and 1H 2025 (54.2%) though the level of better expectation for 2025 has increased.

(c)  Firms surveyed indicated neutral cash flow and debtors’ conditions while a fewer percentage of responding businesses having positive cash flow conditions compared to the previous survey. This cautious view is likely to persist in 2H 2024.

(d)  Businesses have highlighted the following top three factors that continued to impact their performance: The Ringgit’s fluctuations (52.3%), increase in raw material prices (48.9%), and high operating cost and cash flow problem (47.4%).

(e)  Overall sales performance remained positive, although a significant number of respondents in the wholesale and retail trade (49.7%) and manufacturing (45.2%) sectors reported negative sales in 1H 2024.

(f)   Rising cost of raw materials continued to drive operating costs, with over 70% of respondents reporting and expecting higher costs in both 1H 2024 and 2H 2024.

Talent shortage has been an ongoing issue for many industries. The results showed a U-shaped distribution in the share of low-skilled and skilled workers, and a left-skewed distribution in the semi-skilled segment. It indicates a job polarization in a company’s employment structure, with a concentration on either low-skilled or high-skilled workers.

Most respondents are lacking semi-skilled (29.8%) and skilled workers (28.6%). There are 26.0% reported no manpower shortage in their businesses.

Top three hard skills lacking in businesses include (a) Marketing (as ranked by 44.3% of respondents); (b) Data analytics (28.7%); and (c) IT (28.3%). Top three soft skills needed include (a) Leadership (47.8%); (b) Communication (46.3%); and (c) Creativity (42.4%).

The responding employers are underutilising HRD funds, with 43.6% of respondents (excluding micro enterprises as most of them are not bounded by the HRD levy) not sending their employees to the HRD Corp training schemes. Our previous survey cited that low awareness of training courses, the location of training, high compliance cost, and difficulty to fill in the required information were amongst the factors caused a low utilisation of HRD funds.

Additionally, some employers merely view the levy as a form of tax rather than as a resource that can be used to provide a comprehensive training for their employees. Most businesses prefer to opt for in-house training (64.1%) to develop their employees, followed by seminars/events/conferences (36.2%) and external training providers (35.1%).

Tan Sri Dato’ Low said that the business owners and employers must make continuous learning, upskilling and reskilling of employees a priority as it brings considerable benefits to both businesses and employees.  The HRD Corp needs to work together with the industry and academic to continuously review and update the programme to ensure its relevance and effectiveness in addressing evolving industries’ need and skill set requirement as well as related to integrity and governance of the levy management.

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