Rising operating costs continue to influence business decisions across Malaysia, with energy management emerging as a key priority for companies seeking to improve efficiency and strengthen resilience.
According to the UOB Business Outlook Study 2026, most Malaysian businesses remain optimistic despite ongoing economic uncertainties. However, small and medium-sized enterprises (SMEs) are taking a more measured approach as they contend with higher operating expenses, labour costs and interest rates.
The study found that 77% of SMEs maintain a positive business outlook for 2026. Nevertheless, confidence is more restrained among smaller businesses, with nearly three in ten reporting continued pressure from rising costs. As a result, many SMEs are focusing on tighter cost management and operational efficiency rather than aggressive expansion.
Energy management becomes a business priority
As energy prices remain volatile, businesses increasingly view energy management as more than a sustainability initiative. Instead, they now see it as a practical strategy to control costs and strengthen operational resilience.
The study shows that around three in four businesses consider energy management and efficiency important to their operations. The manufacturing, engineering and industrial sectors place the greatest emphasis on this area, with 84% identifying it as a priority.
Businesses highlighted three main objectives:
- Reducing energy consumption (48%)
- Lowering energy costs (44%)
- Ensuring a stable and reliable energy supply (40%)
These priorities reflect growing recognition that better energy management can help businesses improve productivity while reducing exposure to rising utility costs.
Cost pressures continue to challenge SMEs
While business sentiment remains broadly positive, SMEs continue to face financial pressures from multiple fronts.
According to Ng Wei Wei, Chief Executive Officer of UOB Malaysia, the study demonstrates that energy and fuel costs remain among the most significant concerns for businesses.
She noted that medium-sized enterprises are generally better positioned to implement energy efficiency initiatives because they have greater access to sector-specific solutions that address operational requirements.
However, she acknowledged that smaller businesses often face tighter financial constraints.
To support these businesses, UOB Malaysia has expanded its financing assistance through Bank Negara Malaysia’s (BNM) SME Stabilisation Relief Facility, helping SMEs manage cash flow challenges while maintaining operations amid evolving market conditions and external uncertainties.
In addition, the bank continues to offer relief assistance and financial solutions designed to strengthen long-term business resilience.
SMEs continue investing in practical energy solutions
Many businesses have already begun implementing practical measures to reduce energy consumption and operating costs.
The study found that approximately two in five businesses have installed solar panels and LED lighting systems, citing their ability to lower electricity usage and improve efficiency.
Meanwhile, businesses are increasingly exploring digital technologies to optimise energy use.
Among SMEs surveyed:
- 48% are interested in digital tools that improve energy efficiency.
- 44% aim to reduce energy costs through technology.
- 40% seek digital solutions that support a more stable energy supply for day-to-day operations.
These findings suggest that businesses are increasingly combining technology with energy management to improve operational performance.
Business resilience takes precedence over rapid expansion
Beyond cost management, the study points to a broader shift in business strategy.
Instead of pursuing rapid growth, many businesses now prioritise resilience by strengthening operational stability and preparing for future uncertainties.
Energy management has become closely linked with broader resilience objectives, including maintaining business continuity, protecting supply chains and meeting changing customer expectations.
At the same time, companies pursuing supplier diversification, regional expansion and localised manufacturing increasingly view reliable energy management as an important component of their overall risk management strategy.
Study reflects changing business priorities
Now in its seventh year, the UOB Business Outlook Study has adopted a new bi-annual format while expanding its research scope to reflect today’s rapidly evolving economic and geopolitical landscape.
The 2026 edition covers businesses across seven markets: Malaysia, Singapore, Indonesia, Thailand, Vietnam, Mainland China and Hong Kong SAR. The expanded research provides insights into how companies across the region are responding to rising costs, shifting market conditions and increasing operational complexity.
For Malaysian SMEs, the findings highlight a clear trend: businesses remain optimistic about future opportunities, but they are placing greater emphasis on cost control, energy efficiency and financial resilience to navigate an increasingly uncertain business environment.
To get a copy of the study with the full insights, please visit https://www.uobgroup.com/asean-insights/articles/uob-business-outlook-study-2026-malaysia-h1.page
