Rising costs top concern of Malaysian businesses: HSBC survey
PETALING JAYA: Malaysian businesses are grappling with rising costs and persistent supply chain disruptions, prompting them to reconsider their strategies and investment plans.
According to HSBC's 2025 Global Trade Pulse Survey, the ongoing changes in tariffs and evolving trade policies continue to exert pressure on local companies, reshaping the landscape for growth and operations.
Insights from the survey capture the perspectives and intentions of more than 5,700 international firms across 13 markets, including Malaysia, on the challenges and outlook related to tariffs and global trade.
The survey found that, currently, the biggest concern for more than half of Malaysian businesses (55%) is rising costs due to tariffs and other trade-related factors.
In response to this, 42% of Malaysian businesses have shifted their focus to domestic markets, prioritising local customers and reducing international exposure while 40% of businesses plan to do the same.
In addition, the survey showed 37% of Malaysian businesses have increased their inventory levels to manage supply disruptions, with 49% planning to do so as well.
Despite global uncertainties, 250 Malaysia-based companies surveyed are optimistic about their international growth but need external strategic advice on the matter, the findings showed. Furthermore, 91% of companies are confident that they can grow international trade, surpassing the 89% global average.
More encouragingly, 73% believe that trade uncertainty has prompted their business to evolve and explore new opportunities, while 55% are seeking strategic advice on international expansion, restructuring or supply chain realignment.
Considering current trade dynamics, Malaysia-based businesses are adapting their trade strategy to significantly increase connections with China (61%), South Asia (55%) and North Asia (44%).
Beyond Asia, Malaysian businesses also plan to trade more with Europe and the United States (both 32%).
HSBC Malaysia CEO and head of banking Datuk Omar Siddiq said despite the challenges posed by the uncertain tariff and trade landscape, businesses in Malaysia are demonstrating resilience and adaptability in the way they operate.
'While supply chains may be further reconfigured, there continues to be strong potential for local companies to leverage on Malaysia's strong trade ties, particularly in Asia. Having said that, it is key to note that markets like the US remain key trade destinations for Malaysia for high-value sectors such as electronics and semiconductors,' he said in a statement.
While managing costs is top of mind for Malaysian businesses during this period of global uncertainty, the HSBC survey noted that companies are using the opportunity to innovate and adopt new technologies to boost operational efficiencies.
It showed that 64% of Malaysian businesses have adopted new technology or digital platforms, while 48% have developed new products and services.
Other growth opportunities that Malaysian businesses are considering include shifting their focus to domestic or regional growth (57%) and improving their internal efficiencies or changing their cost structures (54%).
During the current period of trade disruption, Malaysian businesses find cash and liquidity management as the most helpful form of support in managing working capital (64%), followed by improved payment terms with buyers and suppliers (56%) and supply chain finance (55%).
'With over 70% of Malaysian businesses anticipating sustained cost increases from the impact of tariffs and trade uncertainty on the cost of doing business, and businesses facing an average 18% drop in revenue, the imperative for strategic adaptation is clear.
'Despite uncertainties, the world is also full of opportunities. Navigating this climate requires not only agility, but strong partnerships to ensure sustained growth in a shifting global economy,' Omar said.
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