MALAYSIA expects investments in the manufacturing sector to surge to more than RM50 billion this year on improved investor and consumer confidence, International Trade and Industry Minister Datuk Seri Mustapa Mohamad said.
The manufacturing sector, which was the fastest growing sector last year, attracted RM47.2 billion in approved investments in 910 projects, a 44.8 per cent jump compared with RM32.6 billion received in 2009.
"We are working hard to build on this momentum," Mustapa said, adding that the pace would also be built on the government's transformation programmes that will take root this year.
Apart from the manufacturing sector, the services sector attracted investments totalling RM27.7 billion during the first nine months of 2010.
Addressing the Malaysian Investment Development Authority (Mida) annual press briefing in Kuala Lumpur yesterday, Mustapa said foreign investments had accounted for RM29.1 billion, an increase of 31.7 per cent from the RM22.1 billion in 2009.
The US was the largest source with investments totalling RM11.7 billion, mainly in electrical and electronics (E&E), machinery and equipment and scientific and measuring equipment.
Other top investors were Japan, Hong Kong, Singapore and Germany.
Malaysia maintains its competitiveness in attracting greenfield investments despite intense global competition for foreign direct investment (FDI), he said.
The projects, when implemented, are expected to create a total of 97,319 jobs, of which 74.2 per cent will be in the high income category.
The services sector attracted 2,407 projects for the first nine months of last year, of which domestic investments accounted for the majority of the investments with RM24.4 billion or 88.1 per cent, while foreign investments totalled only RM3.3 billion or 11.9 per cent.
The services sector covers a broad range of activities including real estate, transport, energy, telecommunications, distributive trade, support services, hotel and tourism.
On liberalisation of the services sector to boost the growth of investments, Mustapa said it will be supplemented with the reduction of tariffs under the bilateral free trade pacts between several countries, including New Zealand and the recently-concluded FTA with India.
"Malaysia will soon sign a framework agreement with the Gulf Cooperation Council, the precursor to the FTA. It will cover cooperation on a broad range of sectors."
On concerns over higher tariff rates of gas supply for new investments, Mustapa hoped that the regasification plant in Malacca would put these woes to an end.
The new tariff rates would, however, be determined by market rates unlike the current supply that is based on subsidised rates.
Meanwhile, Mida said Selangor had topped the number of investments with 207 projects totalling RM4.35 billion, followed by Johor (94 projects totalling RM5.55 billion) and Penang (64 projects totalling RM2.85 billion).