KUALA LUMPUR: Businesses are cautious about the domestic economic and business conditions with ringgit fluctuations, and increases in raw material prices and operating costs dampening sentiment.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Tan Sri Low Kian Chuan said a survey conducted shows a mixed sentiment among businesses for 2024.
The biannual survey, namely "Malaysia's Business and Economic Conditions Survey (M-BECS)", was carried out this year between May 8 and July 17 with 661 responses and 91.2 per cent of them are micro, small and medium enterprises (MSMEs).
"They are anxious about the cost implications following the starting of re-targeting 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," Low said.
The survey highlighted ringgit's fluctuations as the top three factors that continued to impact business performance followed by an increase in raw material prices, and high operating cost and cash flow problem.
Despite ringgit recently performing better against many other currencies, including the US dollar, 52.3 per cent of the respondents see the negative impacts of its fluctuations which can lead to uncertainty in the supply chain, leading to delays and increased costs in logistics and inventory management.
Some 48.9 per cent of respondents voted increase in raw material prices affected their performance, driven by spike in prices of several non-energy commodities and ringgit fluctuations.
Meanwhile, 47.4 per cent of respondents are impacted by high operating cost and cash flow problems where more than half of them for this factor in the wholesale and retail trade (56.4 per cent), manufacturing (56.3 per cent), and construction (54.7 per cent) sectors.
Low said talent shortage has been an ongoing issue for many industries where most respondents are lacking semi-skilled and skilled workers.
"It indicates a job polarization in a company's employment structure, with a concentration on either low-skilled or high-skilled workers," he added.
The survey also revealed that 43.6 per cent of respondents are underutilising HRD funds because 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.
Low urged 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 academics to continuously review and update the programme to ensure its relevance and effectiveness in addressing evolving industries' need and skill set requirements as well as related to integrity and governance of the levy management," he said.