THE SERVICES sector has soared to shine a major silver lining in Malaysia’s mission to draw investments in 2023, contributing to more than half of the total all-time record of RM329.5 billion in annual approved investments.
Minister of Investment, Trade and Industry (MITI) Tengku Zafrul Tengku Abdul Aziz said that the sector achieved RM168.4 billion in investments followed by the manufacturing (RM152 billion), and primary (RM9.1 billion) sectors.
Together they mark an overall 23% increase as compared to RM267.7 billion approved investments the year before.
“The prominence of Malaysia’s services sector has grown steadily over time,” he said at a media conference on Malaysia’s investment performance for 2023 held at Mida Sentral in Kuala Lumpur today.
Also present was Malaysian Investment Development Authority (Mida) chairman Tan Sri Sulaiman Mahbob.
“This sector led the way in terms of approved investments, accounting for RM168.4 billion or 51.1% of the total approvals,” Zafrul said.
“Anticipated to generate 52,732 job opportunities from 4,143 approved projects, this reflects the sector's attractiveness for investments.”
A significant portion of the services sector's investment came from domestic sources, amounting to RM110.5 billion or 65.6%, with foreign investment contributing the remaining 34.4% or RM57.9 billion.
This balanced mix underscores the sector's appeal to both local and international investors, he stressed.
Interestingly, the information and communications sub-sector stood out with RM63.7 billion in approved investments, leading the charge in the services sector's growth.
Other key contributors included real estate (RM61.0 billion), utilities (RM11.1 billion), distributive trade (RM11.1 billion), and support services (RM10.5 billion), each playing a vital role in the sector's dynamism and diversity, Zafrul said.
"The surge in investments within the services sector, particularly in digital infrastructure and sustainable projects, underscores Malaysia's strategic direction towards a resilient and future-ready economy." he commented.
The manufacturing sector, spearheading with RM152.0 billion or 46.1% of the total approved investments, witnessed an impressive growth of 80.3%, a substantial leap from the RM84.3 billion approved investments recorded in 2022.
One noteworthy aspect of the investment influx was the remarkable increase in the capital investment per employee (CIPE) value to RM2.1 million, up by 85.6% from 2022, propelled by the adoption of advanced automation technologies.
“This shift not only enhances companies' production capabilities but also elevates Malaysia’s competitive edge in producing sophisticated products, laying a resilient foundation for sustained national competitiveness,” Zafrul said.
Penang leads among states
Meanwhile, the top five sources of foreign investments were led by neighbour Singapore with RM43.7 billion), the Netherlands (RM35.5 billion), the USA (RM21.5 billion), Cayman Islands (RM17.5 billion) and China (RM14.5 billion).
Penang led the pack of five states that recorded the highest approved investments.
The state dubbed the ‘Pearl of the Orient’ saw RM71.9 billion in approved investments followed by the Federal Territory of Kuala Lumpur (RM58.3 billion), Selangor (RM55.3 billion), Johor (RM43.1 billion) and Kedah (RM28.7 billion).
There was also an impressive number of 5,101 projects approved, signifying a 12.9% increase as compared to 2022.
“These approved projects will generate 127,332 new jobs in the country,” Zafrul said.
Meanwhile, the primary sector registered approved investments of RM9.1 billion, constituting 2.8% of the total approvals.
Driven by 75 projects, the sector is anticipated to see the creation of 661 new jobs, with a focus on mining (RM8.8 billion), and plantation and commodities (RM0.3 billion).
Zafrul stressed that Malaysia’s investment landscape presents bright prospects with a pipeline of proposed investments and lead projects overseen by Mida.
“To date, MIDA’s pipeline boasts 1,710 projects, with proposed investments reaching RM87.8 billion,” he said.
“Of these proposed investments, a total of 1,648 projects are from the selected services sector (RM52.7 billion), while 62 projects are from the manufacturing sector (RM35.1 billion), all of which fall under Mida's purview.”
Additionally, a total amount of RM88.82 billion in high-potential investment leads are actively being negotiated by Mida, he added. – The Vibes, February 29, 2024
