FMM In The News: THE SUN, KUALA LUMPUR, Tuesday, September 6, 2022 - Labour shortage is estimated to have cost Malaysia’s manufacturing industry RM50 billion in the first eight months of the year due to inability to ramp up production to fulfil global supply and increase export trade volumes, according to Federation of Malaysia Manufacturers (FMM) president Tan Sri Soh Thian Lai.
“During the reopening of borders, we should (have taken) the opportunity to ramp up our output to (fulfil global demand),” he told reporters at a press conference after the FMM-MIER Business Conditions Survey presentation today.
He said that due to the lack of workers, local manufacturers were not able add capacity which would in turn be able to increase export trade volumes. Citing July’s exports of about RM135 billion and January-to-June’s exports of RM750 billion, Soh said since the export volume almost reached RM1 trillion, Malaysia could achieve much more with enough workers in the industries.
Rising cost of labour and labour shortage are expected to persist in second-half 2022 (H2’22) as two of the top three obstacles for manufacturers, as it did in H1’22, the survey found.
Soh noted that the shortage of skilled workforce is not a new issue to Malaysia and in every Budget tabling, the government will allocate a substantial amount for the upskilling of the workforce. However, he suggested that the government look into the long-term education policies.
Soh believes Malaysia is facing a shortage of skilled workers that is driven by the lack of supply of science, technology, engineering, mathematics (STEM) students. He opined that, by now, 60% of university students should be from STEM but only 40% are from these disciplines, which is not enough manpower to supply the local industries.
“Malaysia is a trading nation, we have many investors coming in and (every year) the requirements for these skilled workforce is increasing but the supply is not enough. During the MCO, (for example) some expatriates (have left the country) and (these industries) need the locals to fill up the vacancies, but (the amount of workers) are not getting enough,” Soh said.
He added that for the country overall, with the right policies put into place, Malaysia, as a trading nation with strong export networks will be able to overcome any challenges faced next year.
Soh urged manufacturers to be prepared for any eventualities by becoming more competitive; by upgrading and improve their technology; reskilling and upskilling their labour force as well as and monitoring their company’s finances.
During the presentation, Soh said it upholds a cautious outlook for H2’22 as manufacturers are taking a more pragmatic approach to the outlook of their businesses as economic challenges remain unabated for now.
“Across-the-board declines were charted in all the forward-looking indicators this time, with half of them falling below the 100-point optimism threshold, an indication that the manufacturing sector will remain in cautious mode for the rest of 2022,” he said.
Notwithstanding the persistent external headwinds and domestic challenges, including rising inflationary pressures, the manufacturing sector has picked up some momentum in H1’22. Most of the H1’22 indicators showed improvements from the previous survey.