KUALA LUMPUR, 16 JANUARY 2025: Malaysia’s business sentiment among Japanese companies has improved for the fourth consecutive year, according to the 2024 Financial Year Survey by the Japan External Trade Organisation (Jetro) Kuala Lumpur. Jetro highlighted that Malaysia’s profitability exceeded the ASEAN average, with the operating profit margin for 2024 projected at 70.8%.

The survey revealed that Malaysia has been the only major ASEAN nation to record consistent growth over the past four years. It found that 48.9% of companies plan to focus on talent development and employment, while also considering business expansion in the post-COVID era.

Projections for 2025 show that 41.9% of Japanese firms in Malaysia expect operating profits to improve, a slight increase from the previous year. Additionally, 83.5% of respondents have either initiated or intend to implement decarbonisation measures, with Malaysia leading ASEAN nations in local workforce development, employment growth, and decarbonisation initiatives.

The survey also revealed that over 70% of respondents are concerned about rising labour costs, while employee retention remains the most pressing issue among ASEAN countries. Rising inflation-related costs are expected to affect supply chain management, potentially driving the relocation of electrical and electronics production to Malaysia.

Conducted between 20 August and 18 September 2024, the survey covered Japanese companies operating in 20 countries and regions. It also found that 48.9% of firms are considering expanding their operations in the next one to two years.