FMM warns manufacturers may face downturn in 1Q of next year

FMM president Tan Sri Soh Thian Lai

KUALA LUMPUR: The manufacturing sector may face a downturn in the first quarter of next year (Q1 2023) due to global uncertainties, said the Federation of Malaysian Manufacturers (FMM).

Its president Tan Sri Soh Thian Lai has warned industry players to be prepared moving into 2023.

"The government must take proactive actions, engage with the industry to come up with the right policies so that small and medium enterprises (SMEs) can go through the headwinds,” he told reporters at the ‘FMM Industry 4.0 Conference 2022 - The Digital Supply Chain’ today.

He noted that the International Monetary Fund (IMF) has predicted that global growth will slow down next year amid the cost of living crisis, tightening financial conditions, and geopolitical tensions.

Many countries which depend on trade with the United States, China, Russia, and Ukraine are witnessing reduced trade with the relocation of supply chains and job cuts, he added.

However, he said trade skirmishes and war are not the only factors dragging down the world economy but also the European Union energy crisis, high inflation rate, and the lingering COVID-19 pandemic threat.

"However, despite all the challenges, Malaysia’s economy is still considered buoyant and unemployment was considerably low.

"Malaysia's gross domestic product (GDP) exceeded expectations by expanding by 14.2 per cent in the third quarter - the fastest GDP growth posted by any Southeast Asian nation during the period,” he noted. "This highlights Malaysia’s resilience amid the challenging global environment. Growth in the manufacturing sector also improved, supported by better performance of domestic-oriented industries.”

Soh also called on the government to build up the 5G infrastructure within five years, reduce the 4G subscription price and set the 5G subscription price.

"From the FMM point of view, 10 years is too long,” he said, commenting on the government’s announcement that RM15 billion will be invested over a period of 10 years for the implementation of 5G technology throughout the country.

He added that the government must provide a stable 5G network nationwide to support the digitalisation of the economy. - Bernama