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Stable economic growth encouraged Japanese business sentiment for past 5 years

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Syndicated News
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KUALA LUMPUR, June 28 2018 : Japanese business sentiment in Malaysia, which has been at its peak for five years, is expected to improve further in the second half of 2018 and in the future, according ot the findings of an online survey conducted by the Japanese Chamber of Trade & Industry Malaysia (JACTIM) and the Japan External Trade Organisation (JETRO) on the first half of this year.

One hundred and eighty four Japanese companies, which represented 33 per cent of JACTIM’s members responded to the three-month survey, which revealed an increasing trend in business sentiment since the second half of 2015.

Diffusion Index (DI), the leading indicator of business climate for the first half of 2018, recorded 7.1 points, the highest in the last five years.

The survey is conducted twice a year to grasp the problems faced by JACTIM members in their business operations every year.

In a joint statement,  they said many Japanese companies cited the stable economic growth in the country as the main reason for future expansion. 

Japanese companies were attracted to invest in Malaysia because of the high proficiency of the English language among the general workforce.

“Friendly and positive feelings towards Japan, minimal natural disasters, safe and good living environment and quality infrastructure also ranked high among Japanese investors,” the statement said.

However, the survey also revealed that labour policy and employment situation in Malaysia were issues affecting Japanese companies operating in the country.

JETRO and JACTIM said 36.5 per cent of the respondents in the manufacturing sector were facing difficulties in hiring foreign workers.

To counter the difficulties in employing foreign workers, 39.3 per cent of the respondents suggested  mechanisation and automatization as the answer to the problem but 51.9 per cent of the respondents said this was not the answer`as the workforce lacked technical know-how to operate the machines.

“Japanese companies also called for the simplification of the application procedure for foreign workers.

“In the manufacturing sector, the foreign workers made up 15 per cent of total number of employees, “ it said.

Japanese companies also expected further increase in labour cost with minimum wages to be reviewed this year.

“With expectation of wage increase and stringent foreign workers regulation, it is assumed that securing human resource is ‘becoming a chronic issue for Japanese companies,” it stated.

The survey also pointed out that the improvement  in public transport was much to be desired as the transportation network was not fully completed.

Similarly, the survey noted, there were expectation for improvement in airport infrastructure.

“The desire to see improvement in the communication and Internet infrastructure is also high since Internet communication was not satisfactory in certain areas,” it added.

The survey also observed that Japanese companies were carefully watching foreign currency risk caused by the domestic situation and global economy.

It also noted that change in foreign exchange control regulation imposed by the central bank in December 2016 was still affecting Japanese companies. – Bernama

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