PETALING JAYA: Malaysia’s small and medium enterprises are cautiously optimistic about the economy, but are sounding alarm bells on rising costs, weak demand and talent shortages, according to the Samenta SME Outlook Survey 2025/26, powered by Ipsos.
While 65% of SMEs believe Malaysia’s economy is on the right track and 91% expect stable or higher revenues in the next six months, the majority face rising costs, weak domestic demand, talent shortages and escalating compliance burdens that could derail growth.
Small and Medium Enterprises Association of Malaysia (Samenta) national president Datuk William Ng said SMEs are cautiously optimistic about the economy, but optimism alone will not move the needle.
“Seven in 10 SMEs have less than six months’ cash reserves, and 40% say inflation is their biggest headache. Without targeted policies to bridge financing gaps, cut regulatory overload and boost demand, we risk a K-shaped economy where larger companies and the GDP (gross domestic product) show strong growth, but our SMEs continue to struggle,” he said a press statement.
Ng said they are grateful for the government’s strong support for SMEs and welcome ongoing fiscal and labour reforms.
However, he added, many SMEs are struggling to cope with the rapid pace of changes; from tax and subsidy rationalisation to labour mandates and environmental, social and governance (ESG) compliance.
“Unless proportionality is applied in rolling out these reforms, we risk wiping out our SMEs and undoing years of hard-won gains,” Ng said.
Kiranjit Singh, regional head, Apac at Ipsos Strategy3 concurred. “The survey findings reveal both opportunities and vulnerabilities. Slightly more than half of SMEs plan to increase investments over the next six months, and 69% will adjust prices to cope with higher costs. This shows intent to grow. But the picture is uneven, with older, urban SMEs better prepared, while younger and East Coast firms remain vulnerable.”
Key findings of the survey – 65% of respondents say Malaysia’s economy is on the right track; 91% expect stable or higher near-term revenues (5–10% growth); 70% have less than six months’ cash reserves, leaving them exposed to shocks; 40% cite inflation as their top challenge, followed by weak demand (33%) and regulatory pressures (26%); 69% plan to raise prices in the next six months; 74% have training plans, but digitalisation and ESG adoption remain slow and SMEs in Selangor, Kuala Lumpur, Johor and Penang are more optimistic, while East Coast firms are cautious.
Ng concluded: “The survey is an urgent call to act. We cannot rely on headline economic numbers alone, as they mask what’s really happening on the ground. If we want SMEs to contribute to 50% of GDP by 2030 as outlined in the 13th Malaysian Plan, we must accelerate digitalisation, support the green transition, uplift our talent pipeline and make financing more equitable.”