A recent survey conducted by the Federation of Malaysian Manufacturers (FMM) has revealed that only 11% of Malaysian manufacturers are utilizing both the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreements.
The survey also found that 77% of the respondents had not started utilizing these free trade agreements yet, with 41% citing a lack of information or policy direction on these FTAs. FMM has called on the government and trade associations to promote these agreements aggressively so that manufacturers can take advantage of the export opportunities they offer.
The survey also revealed that 55% of respondents faced an increase in their cost of production following the Bank Negara Malaysia's overnight policy rate hike in November 2022, affecting cash flow and business operations of 44% of manufacturers. Meanwhile, 24% of respondents were concerned about a possible change in consumer spending habits that could affect their sales and cash flow, and 20% had to reduce their capital expenditure.
In terms of the new unity government administration, 59% of respondents said it was too early to gauge the impact of any policy changes, while 33% responded favorably. However, most respondents (68%) hoped that the new government would gradually reduce corporate tax rates to improve Malaysia's tax competitiveness.