The Malaysian Insight

PUTRAJAYA must lift the ban on foreign worker intake as industries are struggling to keep up with backlog orders, manufacturers said today.

Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai said the situation stemmed from movement restrictions to curb the spread of Covid-19.

He said the shortage of skilled and unskilled workers could hinder economic recovery.

 “The FMM appeals to the government to consider the plight of the manufacturers that are facing acute manpower shortages to lift the current freeze on foreign workers to fill the gaps in the unskilled general worker category as a short-term measure to assist the industries with their business revival so as to support economic growth for the country.

“It is feared that if the urgent manpower needs are not addressed quickly, it could derail the recovery of the industries including their ability to meet orders in hand and expansion plans,” he said in a statement.

The Manpower Needs survey conducted by FMM in October found there was a shortage of 22,000 workers. The survey interviewed 252 respondents.

 “The highest shortage faced was amongst the low/unskilled general workers category at close to 14,000 workers, this was followed by skilled general workers, technicians, machinists and engineers totalling over 7,000.”

The manufacturing sub-sectors most impacted by the labour shortage were electrical and electronics, food and beverage, chemicals and chemical products, fabricated metal and rubber products, the survey found.

Malaysia is one of the biggest manufacturers of semiconductors. It accounts for 13% of global chip assembly testing and packaging, and 7% of the world’s semiconductor trade passes through Malaysia.

Electrical and electronics exports worth US$92 billion (RM389 billion) made up 39.4% of Malaysia’s total exports last year.

Another survey by the National Chamber of Commerce and Industry Malaysia (NCCIM) in October which involved 835 manufacturers found that there was a shortage of 77,221 workers.

“The manufacturing sector alone requires 77.1% of the total manpower needed, followed by the construction sector (11.2%) and other services (8.9%).”

The NCCIM said there were 697,124 foreign workers employed in 2019 compared to 391,831 in 2021, a 40% drop.

 “FMM is of the view that in order for the industries, especially the export based companies, to bring the business outcomes to a level before the pre-pandemic level the general skill labour conditions in the year 2022 must be replenished with over 600,000 foreign labour workforce to fill the manpower gap.”

The manufacturing sector contributes 23% of the Malaysian economy.

A ban on foreign worker intake was introduced in March last year when Malaysia implemented the first lockdown to curb the spread of Covid-19.

Recently, the government lifted the ban for the agriculture sector, with emphasis on the palm oil sector. – December 4, 2021.