RISING inflation is slowing down the pace of recovery for most Malaysian businesses battered by the Covid pandemic, bodies representing the various business sectors said.

SME Association of Malaysia president Ding Hong Sing said small and medium enterprises (SMEs) have been grappling with inflation since last year.

“That has affected the pace of their business recovery.”

Ding said only between 20% and 60% of Malaysian SMEs had recovered since the last vestiges on the restrictions movement imposed by the government were lifted in January last year.

He told The Malaysian Insight the industry slowest to recover is the furniture industry, “because the export orders plummeted last year.”

Next, Ding said, are the electronics and food industries, with many yet to return to pre-pandemic levels.

“The inflation and the rising cost of living are making consumers cautious on how they spend their money.

“Many are hesitant to spend recklessly.”

Ding said the Russia-Ukraine war had not helped the recovery either, with supply fears leading to a hike in price of goods.

“The resumption of hostilities between Israel and the Palestinians will throw up more fears and uncertainties.”

With all the unexpected global happenings, Ding said it is difficult to predict when the industries would make full recovery.

“We can only hope the wars will end soon.”

He said as long as conflicts create global uncertainties, prices of goods will continue to be unstable.

However, the construction industry has shown signs of improvements.

Master Builders Association Malaysia president Oliver Wee said as of September 18, the industry has been awarded contracts worth RM78 billion.

“We expect to see more projects in the coming months,” he said.

Wee, however, urged caution, saying recovery will still be dependent on the general post-pandemic business environment.

He said at the moment, many businesses are struggling, with rising costs and labour shortages compounding matters.

The recent heavy lorry driver strike, Wee said, led to serious disruption in deliveries in which the construction industry was also not spared.

He said the government has an important role to play in the recovery.

“Government policies, incentives, and investments in infrastructure are all crucial to the recovery process.

“We hope all projects proposed in Budget 2024 and the projects under the 12th Malaysia Plan will be implemented quickly.

“A stable economic environment with low inflation and low interest rates is crucial for attracting investors and promoting construction activities,” he said. – November 1, 2023.