Malaysia’s economy slows but robotic investment to pay dividends

Malaysia’s economy slows but robotic investment to pay dividends

Malaysia will release its second quarter GDP results today, highlighting a one percentage point slowdown from the previous quarter to 5.4% annualised growth.

Robotic car manufacturing in Malaysia

Photo: Youngster

Malaysia will release its second quarter GDP results today, highlighting a one percentage point slowdown from the previous quarter to 5.4% annualised growth. While analysts fear the South East Asian state’s growth may be slowing due to diminishing domestic demand, industrial automation reforms mean productivity continues to keep pace with global trade.

Manufacturing plays a major role in Malaysia’s economy, accounting for a quarter of the country’s output, and 16% of employment. Productivity growth dropped off in 2001, leading the government’s small and medium enterprise agency, SME Corp, to design a “Master Plan” with suggestions for further industrial automation.

Chinese companies have invested $3.5 billion in the “Robotic Future City” automation research centre in Johor Baru, as well as local Chinese-language universities.

Investment in productivity, in line with the One Belt One Road initiative, will grant China more influence in Malaysian business. Despite a slowdown in short-term exports, expect long-term investment to pay dividends as highly skilled jobs flourish a trade with China grows.