KUALA LUMPUR: Investments in the manufacturing, services and primary sectors for the first three quarters fell by 26.5 per cent compared to a year ago to RM113.5 billion.
The services sector recorded a 37.6 per cent drop while the manufacturing sector saw a 15.5 per cent drop during the nine months of 2017.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said while the high base effect due to lumpy projects in Pengerang dan RAPID Johor approved last year is a factor behind this decline, the lower approved investments could also be attributed to the cooling measures in the property market.
“Notwithstanding the increasing level of competition especially with lower cost of production offered by neighbouring countries such as Vietnam and Thailand, our manufacturing sector continues to attract substantial level of investments.”
A total of 464 manufacturing projects worth RM35 billion were approved in January-September 2017 which could potentially create over 32,700 jobs.
For the period, investments involved 3,886 projects and expected to create 91,500 jobs.
Mustapa pointed out that 70.4 per cent of foreign investments recorded in the manufacturing sector were expansion or diversification projects by renowned existing investors such as TF-AMD Micro-Electronics, Longi, Osram, and ASE Electronics Malaysia.
“These expansions should be welcomed as our focus now is on attracting quality investments and they certainly send a strong signal of the continued confidence placed by foreign investors in Malaysia’s economic potential.”
He also noted the prevalent cautious sentiment among the international investors due to global economic uncertainty.
“We’ll continue to ramp up our efforts in positioning local companies as the primary driver of our economic growth. “
Local companies have contributed 73.5 per cent of the approved investments in the first nine months – in line with the government’s target of securing 73 per cent in domestic direct investment and 23 per cent in foreign direct investment by 2020.
Six principal hub projects valued at RM1.5 billion have been approved in the third quarter of 2017 after the completion of the policy review for this scheme in July 2017.
“ We expect more investments to be approved under this scheme. “
On investments in the pipeline, he said the Malaysian Investment Development Authority (MIDA) has a total of 252 projects in the pipeline for the manufacturing and services sectors with total proposed investment of RM10.5 billion.
The majority of these investments are in the machinery & metal products, chemicals, global establishment as well as green technology industries.
Some of these investments are expected to be approved in the next six months, he added.
“Our focus will be on targeting quality investments that will provide a boost to our pursuit of becoming a developed nation by 2020 and leveraging on the mega trends including Industry 4.0 and digital economy.”
These strategies are in line with our efforts to transition Malaysia from a low cost production hub to an innovation-driven economy.