RM51.1 billion. That is what three data centre projects accounted for inside Malaysia’s approvals for the first half of 2022, and it explains most of the headline. Follow the money and the services story looks a little less broad than the totals suggest.
The Malaysian Investment Development Authority (MIDA) said on 2 September that RM123.3 billion (USD28.0 billion) of investment was approved between January and June, spread over 1,714 projects in manufacturing, services and the primary sector. The projects are expected to create 57,771 jobs.
Services take the lead
Services drew RM78.0 billion from 1,351 projects, or 63.3 per cent of everything approved. A year earlier the same sector had RM52.4 billion, so the increase is 48.8 per cent. MIDA called the services result “stellar” and said it exceeded expectations. About 22,569 new jobs are expected from these projects.
Foreign money did the heavy lifting here: RM50.4 billion, or 64.6 per cent, against RM27.6 billion from domestic sources.
Now the mechanics. Information and communications alone took RM53.7 billion, 68.8 per cent of the services total. Within that, three data centres were approved with investments of RM51.1 billion, which is 95.2 per cent of the sub-sector. MIDA named them: Bridge Data Centres Malaysia III and ByteDance System, both from China, and the listed Malaysian company YTL Power International.
Manufacturing looks weaker
Manufacturing came in at RM43.1 billion, 34.9 per cent of the total. The first half of 2021 showed RM75.8 billion, which makes the drop look alarming. MIDA attributed the earlier figure to the approval of a megaproject. That makes the year-on-year comparison a poor guide to the underlying trend.
Electrical and electronics led the factory side with RM19.4 billion. Petroleum products, petrochemicals included, followed with RM5.1 billion, then non-metallic mineral products with RM4.8 billion. MIDA expects the manufacturing approvals to support 35,032 jobs, more than the 22,569 expected from services even though manufacturing drew less capital.
Who is paying, and where
Foreign direct investment made up 70.9 per cent of the total, or RM87.4 billion. China ranked first at RM48.6 billion. Germany followed with RM9.0 billion, Singapore with RM6.0 billion, Brunei with RM5.1 billion and the Netherlands with RM4.1 billion. Domestic sources supplied the remaining 29.1 per cent, RM35.9 billion.
Five states, Johor, Selangor, Sabah, Kedah and Pulau Pinang, accounted for RM103.5 billion, or 83.9 per cent of approvals. The primary sector added only RM2.2 billion.
Senior Minister Mohamed Azmin Ali, who heads the Ministry of International Trade and Industry, said Malaysia “is on the right trajectory to secure more high-quality, high impact and capital-intensive projects,” with services the key growth driver. He added that the ministry would “intensify our focus” on the digital economy, electrical and electronics, pharmaceuticals, chemicals and aerospace.
Sources
- Malaysia Attracted RM123.3 Billion (USD28.0 Billion) of Approved Investments For The First Half Of 2022 – MIDA
- Malaysia attracted RM123.3b approved investments in 1H22; led by services sector – The Edge Malaysia
