Kuala Lumpur, June 13 (BNA): Malaysian companies from palm oil plantations to semiconductor makers are rejecting orders and ditching billions in sales due to a shortage of more than one million workers threatening the country’s economic recovery.
Despite the lifting of the COVID-19 freeze on recruiting foreign workers in February, Malaysia has not seen a significant return of migrant workers due to slow government approvals and protracted negotiations with Indonesia and Bangladesh on labor protection, industry groups, companies and diplomats reported, Reuters reported. .
The export-reliant Southeast Asian country, a key link in the global supply chain, relies on millions of foreigners for factory, farm, and service sector jobs that locals shun as filthy, dangerous and tough.
Manufacturers, who make up nearly a quarter of the economy, fear losing customers to other countries as growth picks up.
“Despite great optimism in the outlook and increased sales, some companies are facing serious hurdles in their ability to meet orders,” said Suh Thien Lai, president of the Malaysian Manufacturers Association, which represents more than 3,500 companies.
Carl Beck Nielsen, chief executive of oil palm plantations United Plantations, said palm oil growers are on the verge of collapse.
He said, “The situation is horrible and is very similar to having to play a football match against 11 players, but only seven were allowed.”
Malaysia is short of at least 1.2 million workers in manufacturing, farms and construction, and shortages are exacerbating daily as demand grows as the pandemic eases, according to industry and government data.
Manufacturers say they have 600,000 workers, construction needs 550,000, the palm oil industry reports a shortage of 120,000 workers, and chip makers are short of 15,000 and cannot meet demand despite a global wafer shortage, and medical glove makers say they need to 12 thousand workers.
Malaysia’s manufacturing PMI fell to 50.1 in May from 51.6 in April, and has barely kept expanding, as the sector has shed most jobs since August 2020, according to data from S&P Global.
Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, says chip makers are turning away from customers, locals aren’t interested in working in the industry and many who join the sabbatical in less than half a year.
The palm oil industry, which contributes 5% to the Malaysian economy, warns that 3 million tons of crops will be lost this year due to not picking rotten fruit, which means more than $4 billion in losses. The rubber glove industry estimates a revenue loss of $700 million this year if the labor shortage continues.
FKN