Malaysian manufacturers still hit by West Asia war as firms shift raw‑material sourcing to Singapore, China, survey finds

KUALA LUMPUR, Sept 3 — Malaysia's manufacturing sector is grappling with the ongoing effects of the West Asia war, according to a recent survey conducted by the Federation of Malaysian Manufacturers (FMM). An overwhelming majority of respondents, 96 percent, reported that the geopolitical turmoil has impacted their operations to some degree.

The primary concerns cited by manufacturers are supply-chain disruptions and escalating input costs, which have disproportionately affected high-value industries such as automotive, plastics, and pharmaceuticals. In response to the challenges, many firms are shifting their sourcing strategies to Singapore and China. However, this pivot comes at a cost, with increased logistics and operational expenses weighing on companies.

While some disruptions appear to be easing for 40 percent of manufacturers, the situation remains elevated for a significant portion of the industry. Manufacturers are also facing higher energy and fuel costs, as well as increased working capital demands. Policy calls for targeted government support, with 56 percent of manufacturers advocating for duty and tax exemptions on alternative raw materials, 40 percent seeking fuel rebates, and 32 percent supporting tariff reductions or accelerated trade agreements.