Kuala Lumpur, 1 April 2026—A recent Quick-Take Survey (QTS) conducted by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) highlights growing concerns among Malaysian businesses, particularly small and medium enterprises (SMEs), over the impact of ongoing oil shocks and geopolitical tensions.
The survey, carried out between 19 and 25 March 2026 and involving 203 respondents across various economic sectors, found that micro, small and medium enterprises (MSMEs) made up 95.1% of participants. Overall, most respondents reported a “moderate to significant deterioration” in business outlook over the next three to six months.
According to the findings, the ongoing military conflict in the Middle East is creating immediate operational challenges for businesses. Companies are facing a difficult environment marked by limited visibility on input supply, rising costs, and increasing fuel prices. These pressures are especially difficult for businesses not supported under subsidised fuel schemes.
Rising Costs Across Sectors
The survey shows that cost pressures are becoming widespread. About 44.3% of respondents reported that energy accounts for more than 10% of their production and operating expenses. Within this group, 24.6% reported energy costs at 5%–10%, 21.7% at 11%–20%, and 12.3% at 21%–40%.
Uncertainty in the geopolitical landscape has further affected business confidence. Factors contributing to rising operational costs include higher fuel prices, transportation and logistics costs, raw material costs due to supply chain disruptions, as well as increased shipping and air freight rates.
Industries impacted include construction, aviation, plantation, retail, and manufacturing. Within manufacturing, energy-intensive sectors such as iron and steel, textiles, cement, and glass products are particularly affected. The agricultural sector is also experiencing pressure due to reliance on crude oil for machinery fuel, transportation, and inputs such as fertilisers, pesticides, and plastics.
Profitability and Cash Flow Pressures
The survey indicates that 51.2% of respondents expect total costs to increase by between 6% and 20%, while 20.2% anticipate cost increases exceeding 20%. In terms of financial health, 46.3% of respondents reported moderate to significant deterioration in cash flow.
Profitability is also under strain, with 31.0% of respondents experiencing slight decreases, 33.0% reporting moderate decreases, and 26.6% facing significant declines in profitability.
Looking ahead, many businesses expect continued challenges. Most respondents foresee moderate to significant deterioration in business outlook over the next three to six months if oil shocks persist. Notably, 31.0% of respondents indicated they can sustain operations for only three to six months before needing to consider downsizing or seeking additional financing.
SME Survival Concerns
For many SMEs, which have already been dealing with rising operational costs over the past two years, the primary concern is maintaining business continuity. Sustained cost pressures may increase the risk of financial distress or closure if conditions do not improve.
Policy Direction
In response to these challenges, ACCCIM has proposed a combination of immediate policy support measures alongside longer-term strategic shifts in energy policy. These efforts aim to alleviate fuel cost pressures and mitigate supply chain disruptions affecting business operations and cash flow.
The findings underscore the urgency for SMEs to adapt to a more challenging cost environment while policymakers consider measures to support business resilience amid ongoing global uncertainties.
Measures to Support Businesses Amid Oil Shock Pressures
ACCCIM proposes a range of measures to support businesses amid rising costs and economic uncertainty. In the short term, these include targeted repayment assistance through temporary suspension of loan principal and interest, reductions in Service Tax rates, and tax policy adjustments such as lowering CP204 advance tax requirements, suspending penalties, and allowing tax offsets to improve cash flow. Additional relief includes reviewing electricity tariffs under the Time of Use scheme, expanding energy efficiency incentives, and providing temporary waivers or reductions in port, transportation, and freight charges, with the possibility of lower interest rates if conditions worsen.
For longer-term resilience, ACCCIM recommends promoting energy efficiency through reduced SST or green tax incentives on energy-related products, full SST waivers on solar equipment, and accelerated depreciation for energy-efficient machinery. It also proposes soft loans and co-funding to encourage investment in automation and energy-efficient technologies.
Sector-specific measures include enhancing export credit insurance, providing subsidies for fertiliser, fuel, and electricity in the agriculture and plantation sectors, and introducing limited quota subsidised fuel for heavy machinery users in construction, agriculture, and timber industries. For construction, ACCCIM suggests implementing Variation of Price clauses and suspending Liquidated Ascertained Damages penalties, while for tourism, temporary fuel subsidies for inbound transport operators are recommended. A government-to-industry information-sharing mechanism is also proposed, along with a potential targeted wage subsidy programme if conditions deteriorate further.
