Malaysian businesses turn to domestic market as cost pressures persist

A recent survey reveals that Malaysian businesses are increasingly focusing on the domestic market as their primary growth opportunity, with 75% of surveyed companies identifying it as the leading option. This marks the highest proportion of such interest among the six ASEAN markets examined. The findings, published by The Great Restructuring: ASEAN Consumer & Business Pulse Survey 2026 by Reeracoen Group and Rakuten Insight, indicate that businesses are adopting a cautious approach to hiring and investment due to ongoing cost pressures.

Three-quarters of the Malaysian businesses surveyed are concentrating on enhancing their existing operations while exercising greater selectivity in their workforce expansion. Only 36% of companies reported hiring selectively, while just 7% said they were expanding their headcount. Yohei Yagi, Reeracoen Malaysia country manager, explained that employers are becoming more deliberate in their staffing decisions, aligning them with long-term business priorities.

In terms of investment, 46% of businesses stated that they maintained their current spending levels, while 16% indicated an increase. Meanwhile, Malaysian consumers are also adjusting their spending habits in response to rising household costs, with 88% of surveyed consumers adopting a more cautious approach to their expenditures.

Food prices were the most commonly cited factor affecting consumer spending, mentioned by 64% of respondents, followed by fuel and transport costs at 46%, and household bills at 38%. Over half of the consumers, or 54%, expressed a desire to seek additional income sources, while 41% indicated they were increasing their savings. Rakuten Insight country director for Malaysia and Thailand, Collin Leow, highlighted that both businesses and households are adjusting to the evolving economic landscape, with companies prioritizing domestic opportunities and operational efficiency, while consumers are reevaluating their spending and financial priorities.

The survey encompassed six ASEAN markets, offering valuable insights into how businesses and consumers are navigating the current economic conditions.