KUALA LUMPUR (Aug 10): Malaysia’s foreign investment in the first quarter of this year surged by 73.4%, from RM16.9 billion in the first quarter of last year to RM29.3 billion in the first quarter of this year.
The Malaysian Investment Development Authority (MIDA) issued a statement today stating that despite the global economic uncertainty and challenges brought about by the China-US trade war, investors are still full of confidence in Malaysia as an investment destination.
In this regard, the Malaysian Investment Development Authority (MIDA) will continue to attract high-quality investment and promote the approved investment projects. So far, 471 projects with a total investment of RM30.4 billion in manufacturing and services have been under preparation.
In the first quarter of this year, Malaysia successfully attracted RM53.9 billion in manufacturing, services and the primary industry, which was 3.1% higher than the RM53.2 billion in the same period last year. The positive growth in the first investment this year was mainly due to the strong performance of the manufacturing industry, which surged by 126.8% compared with the first quarter of 2018.
Local investment reached RM 24.6 billion
Among the RM53.9 billion investments, local investment in the first quarter of this year reached RM24.6 billion, accounting for 45.6% of the total investment.
A total of 1,678 investment projects were approved from January to March this year, and it is expected to create 4,200 jobs for Malaysia. Among them, manufacturing accounted for the largest proportion of potential employment, with 22,970 jobs or 55.7%, followed by services, with 18,000 jobs (43.7%) and 240 jobs in the primary industry (0.6 %).
In the first quarter of this year, the service industry attracted most of the approved investment and obtained 1,445 approved investment projects with an investment of RM26.1 billion. Among them, domestic investment contributed RM18 billion, accounting for 69% of the total approved investment, while foreign investment contributed RM8.1 billion or 31%.
The top five major service sectors with the highest investment are real estate (RM11 billion or 42.3%), followed by distribution trade (RM8.2 billion or 31.6%), utilities (RM4 billion or 15.4%), hotels and tourism (RM1.8 billion or 7.0%) and support services (RM55.9 million or 2.1%). 95.8% of service employment opportunities will come from distribution trade, hotels and tourism, and education sub-sectors.
In the distribution trade sub-sector alone, the total number of potential jobs created in the first quarter of this year exceeded 14,000, making it the largest employer in the service industry. Both large and small businesses have employment opportunities, and wholesale and retail trade accounts for 59.3% of employment opportunities.
The development of the hotel industry across the country will provide opportunities for young people to learn the skills of working in high-end four-star and five-star hotels. Investment projects in the hotel and tourism sub-sectors will create about 2,300 new jobs from management positions to frontline operations.
There is also a need for manpower in the private education sector, and the newly established private education institution will employ more than 800 employees, including the work of higher education faculty.
Manufacturing approved investment amounted to RM 25.4 billion
The Malaysian manufacturing industry remains resilient, with an approved investment of RM25.4 billion in the first quarter of 2019, which is 126.8% higher than the RM11.2 billion in the first quarter of 2018.
The Malaysian Investment Development Authority (MIDA) issued a statement today stating that the proportion of capital investment per employee in the manufacturing projects approved in the first quarter of this year was RM1, 558,582, compared with RM805, 531 in the same period in 2018.
In the first quarter of 2019, a total of 6 manufacturing approved projects invested more than RM1 billion, with a total investment of RM16.5 billion. In addition, there were 20 approved projects in the manufacturing industry with an investment of more than RM100 million. The investment in these 26 projects reached RM22.3 billion, accounting for 87.8% of the total approved investment in the manufacturing industry.
The approved manufacturing project will create 22,970 new jobs, including 1,590 electrical and electronic engineers, 710 mechanical engineers and 180 chemical engineers. From January to March 2019, foreign investment in approved manufacturing projects increased by 127%, from RM8.9 billion in the same period last year to RM20.2 billion.
These approved projects are expected to stimulate strong multiplier effects, including growth of local companies or engineering supporting industries, cluster development, local procurement, enhanced R&D activities and human capital development.
The United States (RM11.5 billion), China (RM4 billion), Singapore (RM22.2 billion), Japan (RM600 million) and the British Virgin Islands (RM500 million) accounted for 95.0% of the total approved foreign investment in manufacturing.
Manufacturing business expanded in Penang
Two notable US investments are from Micron Technology and Jabil Circuit; these companies will expand their manufacturing operations in Penang.
It is worth mentioning that an investment from China, XSD International Paper; the project is expected to invest RM2.3 billion to promote the development of all relevant paper industry in Penang. The company plans to work with local technical universities to improve papermaking technology in Malaysia.
In the first three months of 2019, the electrical and electronics industry contributed 92.8% of the total approved investment in the 3 + 2 field. Once implemented, these projects will further promote the development and growth of the entire manufacturing industry in Malaysia.
70% or 150 approved manufacturing projects have a total of 75 projects in Selangor, 41 projects in Penang and 34 projects in Johor.
However, in terms of value, Penang will be the largest investor beneficiary (RM8.8 billion), followed by Kedah (RM7.6 billion) and Johor (RM2.4 billion).
As for the primary industry, the total approved investment in the first quarter of this year totaled RM2.4 billion or 4.5%. Most of the investment came from local (RM1.4 billion or 58.3%), while foreign investment reached RM1 billion or 41.7%.
The mining sector, which is dominated by oil and gas exploration activities, is leading the industry with an approved investment of RM2.2 billion or 91.7%, followed by planting and commodities of RM140 million and agricultural sub-sectors of RM43.5 million.
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