HSBC Survey: Malaysian firms turn inward amid rising trade pressures
KUALA LUMPUR: Around 42 per cent of Malaysian businesses have shifted their focus to the domestic market, prioritising local customers and minimising exposure to global uncertainties, according to HSBC's 2025 Global Trade Pulse Survey.
This strategic pivot reflects efforts by companies to mitigate the effects of tariffs and other trade-related challenges on their operations.
Among the 250 Malaysian firms surveyed, more than half flagged rising costs from tariffs and trade barriers as a key concern.
To address ongoing supply chain disruptions, 37 per cent have already increased inventory levels, while another 49 per cent plan to do the same, signalling a broader push towards strengthening supply chain resilience.
Despite the global uncertainties, optimism about international growth remains high among Malaysian businesses but they need external strategic advice on the matter.
91 per cent of them expressed confidence in their ability to grow international trade, surpassing the global average of 89 per cent.
Encouragingly, 73 per cent of respondents believe that trade uncertainty has prompted their businesses to evolve and seek new opportunities.
Meanwhile, more than half are actively seeking strategic advice on international expansion, business restructuring or supply chain realignment.
Considering current trade dynamics, 61 per cent of the local businesses are adapting their trade strategy to significantly increase connections with China, followed by South Asia (55 per cent) and North Asia (44 per cent).
32 per cent of them plan to trade more with Europe and the United States.
HSBC Malaysia chief executive officer and head of banking Datuk Omar Siddiq said the businesses in Malaysia continue to show resilience and adaptability in navigating the challenges posed by the uncertain tariff and trade landscape.
"While supply chains may be further reconfigured, there continues to be strong potential for local companies to leverage 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.
The survey also pointed out that while managing cost remains a top priority for Malaysian businesses amid global uncertainties, many are seizing the opportunity to innovate and adopt new technology to boost operational efficiencies.
HSBC said 64 per cent of Malaysian businesses have adopted new technology or digital platforms, while 48 per cent have developed new products and services.
Other growth opportunities that the businesses are considering include shifting their focus to domestic or regional growth (57 per cent) and improving their internal efficiencies or changing their cost structures (54 per cent).
The survey also indicates that 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 per cent), followed by improved payment terms with buyers and suppliers (56 per cent) and supply chain finance (55 per cent).
"With over 70 per cent 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 per cent 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 added.
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