Kuala Lumpur:American manufacturers operating in Malaysia are shifting their sourcing strategies by reducing reliance on China and increasingly obtaining inputs from Malaysia. This change follows the implementation of US tariffs, as reported by the American Malaysian Chamber of Commerce (AMCHAM).
According to BERNAMA News Agency, AMCHAM's chief executive officer, Datuk Siobhan Das, revealed that 43% of manufacturers who previously sourced inputs from China have decreased their dependence, with none reporting an increase. Additionally, 36% of respondents have adjusted their sourcing or production strategies to meet rules-of-origin requirements, and 34% have increased the share of inputs sourced from Malaysia.
Despite these adjustments, 86% of manufacturers reported that their fundamental business models remained unchanged. Many companies adapted their sourcing, pricing, and production processes, signaling a commitment to Malaysia rather than retreating. This adaptation has created new opportunities within Malaysia.
The findings were presented during AMCHAM's survey titled 'Invested in Malaysia The Economic Impact and Outlook of American Business.' The survey also revealed that manufacturing respondents anticipate a total project cost of RM42.86 billion for 2024-2025, marking an increase of almost 51% from the previous survey. This reflects a positive long-term outlook and a strong commitment to Malaysia.
Siobhan Das noted that even manufacturers with declining revenues during the survey period expect future growth, viewing challenges as manageable rather than reasons to withdraw from Malaysia. This confidence is mirrored in Malaysia's broader investment climate.
Additionally, Malaysian Investment Development Authority CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid highlighted that while Malaysia's skilled workforce is a significant asset, there are challenges in finding workers with advanced skills, particularly in fields like engineering, digital technology, data, and artificial intelligence.
The survey included responses from 88 AMCHAM member companies, encompassing manufacturers, service companies, agribusiness, and energy sectors.