KUALA LUMPUR, 17 DECEMBER 2025: German companies operating in Malaysia remain broadly confident about the local market heading into 2026 despite ongoing global uncertainty, according to a survey.

Nearly nine out of 10 German firms in Malaysia rate their current business situation as “good” or “satisfactory” while 90% expect economic conditions in 2026 to remain stable or favourable, according to results of the AHK World Business Outlook Survey Fall 2025.

“German companies in Malaysia are entering 2026 with a solid foundation and a high degree of confidence,” said Hannes Farlock, executive director of the Malaysian-German Chamber of Commerce and Industry (MGCC) that compiles the survey.

The survey was conducted between Sept 29 and Oct 17, with respondents from MGCC members that comprise mostly German companies with branches or subsidiaries in Malaysia, covering the manufacturing, trade and service sectors.

The survey is part of the broader AHK World Business Outlook, a biannual global research initiative conducted by the German Chamber of Commerce and Industry.

Nearly half of the Malaysian respondents expect improved business performance in the coming year, while 43% anticipate stable conditions. Only 7% foresee a downturn, pointing to overall resilience among German businesses in the country.

Investment expansion plans, however, have moderated with 28% of companies planning to increase investments versus 39% a year earlier. However, 47% intend to maintain current investment levels, indicating continued confidence in Malaysia’s stability.

Employment prospects also remain positive, with 49% of companies planning to increase their workforce over the next 12 months, while 36% expect staffing levels to remain unchanged.

Key risks for the coming year include weak global demand, identified by more than two-thirds of the respondents, economic policy conditions (42%), trade barriers and preferential treatment of domestic competitors (39%), and shortages of skilled labour (37%).

On US trade policy, more than half of the respondents reported negative impacts. About 64% of the companies surveyed saw no direct business ties with the US, suggesting indirect impacts through global supply chains.

Among firms with US exposure, the main concerns were tariffs and increased competitive pressure due to trade diversion.