Malaysian SMEs See Business Recovery In 2010

SOURCE: BERNAMA.COM

KUALA LUMPUR, Aug 19 (Bernama) -- Small and medium enterprises (SMEs) in Malaysia are optimistic that the current sluggish global economy will recover by this year or in 2010, according to the UPS Asia Business Monitor (UPS ABM) 2009.

In a statement on Wednesday, UPS said Malaysian SMEs, along with those surveyed in India, Taiwan, China and Singapore were the most optimistic toward recovery next year.

"Business prospects for 2009 have taken a sharp downturn. SME leaders in Malaysia are looking to offer more value added products and services, diversify their business and explore new revenue streams," said UPS Malaysia marketing manager Tee Wee Ping.

Tee said, of the 100 companies surveyed across Malaysia, 69 percent expected economic growth for the Asia Pacific to decline this year compared to only eight percent in 2008.

Furthermore, only 21 percent of SMEs in Malaysia predicted better business growth prospects for their companies this year, compared to 73 percent in 2008, he explained.

The ABM 2009 also revealed that despite the impact of the slowdown on their business, SMEs in Malaysia are still showing pockets of confidence by remaining stable with 40 percent of them expecting business prospects to remain the same.

"Most felt that tightening cash management via strict credit control and collection plans, exploring new revenue lines and reducing other cost such as rent, utilities and miscellaneous items is the way to sustain business and counter the effects of a global economic recession," he said.

Tee added SME leaders are not looking to downsize their staff count despite the current economic conditions as retaining talent and providing adequate training and support to employees is a key factor to growing a qualified workforce and staying competitive.

About 61 percent of Malaysian SMEs also intend to retain their current workforce with another 24 percent planning new recruitment.

He said the lack of a qualified workforce has been rated as one the biggest threats to the competitiveness and future growth of SMEs in Malaysia.

Overall in Asia, SMEs in the region saw major obstacles to competitiveness in the form of lack of government support, access to funding and working capital, innovation and the availability of a qualified workforce.