Herd immunity: People queueing up for Covid-19 jabs at the Malaysia International Trade and Exhibition Centre in Kuala Lumpur. — AZHAR MAHFOF/The Star
PETALING JAYA: Four years have passed since the Covid-19 movement control order (MCO) was imposed, and yet it is still not business as usual for several sectors of the economy.
Recounting the experience, Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai said it was tough going for the manufacturing sector and others during the early stages of the pandemic.
“Most sectors, including the manufacturing sector, were impacted, with some being hit harder than the rest, such as the travel, hospitality and entertainment sectors,” he said when contacted.
However, there were other sectors that thrived, particularly those in the ecommerce, technology and healthcare sectors, although they also faced challenges such as disruption in the supply chain, Soh said.
“Businesses had to adapt to the new normal in business operations, including leveraging technology for remote work, ecommerce and digital transformation,” he said.
As for recovery, Soh said it has been very challenging due to circumstances during the post-Covid-19 period, including a global economic slowdown, rising cost of living, disruption to supply chains and geopolitical developments.
As such, he said, the performance of businesses in trade, investment and employment has not returned to robust levels, thus impacting the overall growth of the economy.
But things are beginning to improve for the manufacturing sector, with 2024 projected to see recovery gaining momentum albeit gradually, based on a recent survey carried out by FMM, he said.
Malaysia Retailers Association president Datuk Andrew Lim said the first two years of the pandemic were the most challenging for the retail sector. “The most painful and financially damaging experience was between 2020 and 2022 when many retailers went under.
“This included food and beverage outlets, grocery and department stores,” he said when contacted.
The turnaround began after April 1, 2022 when the nation entered the transition and economic recovery phases.
“The retail sector experienced a surge in business and reached an 80% level of what it was during the pre-pandemic period in 2019. However, the recovery was not uniform across the board.
“Some sectors did better than others. For example, food and beverage came back very strongly while department stores did not do as well owing to competition from online stores,” he said.
Lim said this was due to changes in purchasing trends among consumers who relied on online stores during the pandemic period and the habit persisted afterwards.
He said recovery this year could reach 90% and would be even better if more consumers bought locally-made products or from local online stores.
This, he added, would prevent greater outflow of the ringgit and help to strengthen it.
Industries Unite co-founder Datuk David Gurupatham said changes in consumer spending patterns might affect the recovery.
“Shops can be full but people may not be spending as much as before because they are now going for cheaper options instead,” he said.
David, who co-founded the coalition of more than 40 trade, business and professional associations, attributed the changes in spending patterns to the rising cost of living.
He noted that entertainment outlets such as nightclubs, bars and pubs began experiencing a return of business and positive increase in 2022.
“However, things began to slow down exactly a year later in 2023, when people started leaning towards spending on essentials rather than non-essentials,” he said.
Federation of Malaysian Business Association vice-chairman Nivas Ragavan said businesses are still recuperating.
He highlighted how the Covid-19 pandemic was not just a “cough and cold” matter.
There were about 1.2 million micro, small and medium enterprises (MSME) prior to the pandemic. Yet between 40% and 45% of businesses were disrupted and closed due to the lockdowns, according to an SME Corp survey, said Nivas, who is also president of the Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry.
“The whole ecosystem was disrupted. Rebuilding takes time, as it took years to reach that point,” he said.
While the government has limitations in terms of budget, it should find ways to create a business-friendly approach for MSMEs, he added.
The MCO was declared on March 18, 2020, and officially ended on Jan 2, 2022 with the nation entering the “transition to endemic” phase.
The country’s borders were opened to all travellers on April 1 the same year.
