By Sherilyn Goh
Mustapa Mohamed
Investments in the manufacturing, services and primary sectors plunged 14.8% year-on-year (y-o-y) to RM153.2 billion in the first nine months of 2015 (9M15) compared to RM180 billion approved during the same period last year, according to the Minister of International Trade and Industry Mustapa Mohamed.
The drop in investments, he said, is driven by a big decline in approval for investments in the real estate sector, which observed a 64% y-o-y decline to RM21 billion in 9M15, down from RM57.9 billion recorded between January and September last year, consistent with the slowdown in the property market.
In line with lower investments in upstream oil and gas activities amid the challenge in global crude oil prices, investments in the primary sector have also taken a hit, recording only RM2.8 billion in 9M15 compared to RM12.2 billion last year which amounts to a 77% decline.
The drastic decline in investments in the property and primary sectors is offset by the approvals in other sectors including manufacturing, which he said remained robust.
“Malaysia continues to be a preferred investment destination despite falling global foreign direct investment flows. And the high rate of domestic investments demonstrates the confidence of Malaysian investors in the government’s Economic Transformation Programme.
“The outlook for the full year of 2015 would still be encouraging, with approval levels in the manufacturing sector being on track. I am optimistic that the services sector, with the exception of of the real estate industry, will also deliver a similar performance,” he said.
The services sector makes up the largest portion of Malaysia’s total investments, contributing RM82.7 billion (54%). This is followed by the manufacturing sector with investments of RM67.7 billion (44.2%), and the primary sector which received approved investments totaling RM2.8 billion (1.8%).
The total investments approved were in 3,727 projects and are expected to generate 139,720 jobs opportunities for Malaysians. Of that, domestic investments of RM124.9 billion constituted 82% of total investments, while foreign investments made up the rest.
The manufacturing sector saw a 6.5% y-o-y increase in investment of RM67.7 billion, which Mustapa attributed to the government’s initiative in promoting investment in capital-intensive. high value-added and high technology projects.
This, he said, is reflected in the increase of the capital investment per employee (CIPE) ratio to RM1.35 million in 9M15 from RM970,938 during the same period last year.
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