世界发展银行-Impacts-of-COID-19-on-Firms-in-Malaysia,-Round-2---Results-from-the-2nd-Round-of-COVID-19-Business-Pulse-Survey_14页_749kb

Summary of the Impacts of COVID-19 on Firms in Malaysia

Core Content

This document presents the findings of the 2nd Round of the COVID-19 Business Pulse Survey (BPS) conducted in Malaysia from January 15 to February 10, 2021. It provides insights into the impact of the pandemic on firms, their adjustment strategies, and the effectiveness of government support measures.

Key Findings

• Lockdown Impact: The re-imposition of the Conditional Movement Control Order (CMCO) in October 2020 and the stricter Movement Control Order (MCO 2.0) in January 2021 significantly weakened the recovery momentum seen in the first round of the survey.
• Operational Status:
  • 84% of firms were operating during January to mid-February 2021, but 57% operated only partially, and 16% remained closed.
  • Regional differences were observed, with Northern and Eastern states experiencing higher closure rates.
• Sales Decline:
  • Sales declined by 22% during the second CMCO (October 2020), and 16% during MCO 2.0 (January 2021), which is less severe than the first MCO (25% decline).
  • The percentage of firms facing decreasing demand increased, indicating a shift in market dynamics.
• Employment Adjustments:
  • Reducing work hours is the most common adjustment, with significant churn in the labor market.
  • Small firms are less likely to fire workers compared to medium and large firms.
• Liquidity Issues:
  • Malaysian firms have relatively low liquidity buffers, with the median firm having only two months of cash flow available.
  • The agriculture & mining sector has the highest rate of firms in arrears, while food & beverage services and construction firms expect the highest risks.
• Digital Adoption:
  • 58% of firms increased the use of digital platforms, primarily for sales and marketing.
  • Larger firms are more likely to adopt digital tools for complex functions like production and supply chain management.
  • Firms that adopted digital tools are more likely to implement remote work arrangements and introduce new products.
• Government Support:
  • 80% of small firms accessed government support programs, compared to 94% of large and 93% of medium firms.
  • Wage subsidies were found to be effective in reducing layoffs.
  • Payment deferrals and wage subsidies were the most important support needed by firms, with the exception of the agriculture and mining sector, which prioritized support for adopting health protocols and buying local products.
• Confidence in Government:
  • 57% of firms expressed confidence in the government's handling of the pandemic.
  • 63% of firms found the 2021 Budget to adequately address their concerns.
  • Firms called for better roll-out of Standard Operating Procedures (SOPs) and faster approvals and disbursements for existing support measures.

Methodology

• The BPS survey is a rapid survey designed to assess the impact of the pandemic on firms, their adjustment strategies, and public policy responses.
• The survey was conducted online with a sample of 1,500 firms from senior management positions.
• The survey included 100,000+ companies across all sectors and sizes in Peninsular and East Malaysia.
• Targeted sampling ensured representation of key sectors such as electronics, automotive, and tourism-related activities.

Malaysia and the “New Normal”

• Malaysia implemented several lockdown phases, including:
  • MCO (March–May 2020)
  • CMCO (May–June 2020)
  • RMCO (June–August 2020)
  • 2nd CMCO (October–December 2020)
  • 2nd MCO (January–March 2021)
  • CMCO (March 2021 onwards)
• The PERMAL and PEMERKASA stimulus packages were introduced to support firms and households during the crisis.

Financial and Operational Shocks

• Supply chain disruptions remained a major issue, though the proportion of affected firms remained relatively stable.
• Increased competition was noted, driven by both reduced demand and a larger number of competitors.
• Liquidity issues persisted, with firms reporting concerns about non-repayment fears and reduced supplier credit.

Policy Support and Government Response

• Government support was widely accessed, with the highest access in Malaysia compared to regional peers.
• Wage subsidies were effective in limiting layoffs.
• Payment deferrals and wage subsidies were the most sought-after support measures.
• Firms emphasized the need for predictability in SOP regulations and expedited disbursement of support programs.

Next Steps

• The 3rd and 4th rounds of the BPS are planned for June and September 2021, respectively.
• The goal is to track recovery and adaptation of firms and produce a comprehensive analysis after the fourth round.

Conclusion

Malaysian firms have shown resilience compared to regional peers, despite ongoing challenges in liquidity, demand, and employment. The government's support measures have been generally well-received, though there is room for improvement in policy implementation and access for small firms. Continued monitoring and targeted policy interventions are essential for sustained recovery.