KUALA LUMPUR - Most German companies operating in Malaysia remain confident the local business environment will stay resilient into 2026, despite global economic headwinds, a new survey has found.

According to Free Malaysia Today, the Malaysian-German Chamber of Commerce and Industry (MGCC) said 87 per cent of respondents rated the current business situation as “good and satisfactory”.

MGCC executive director Hannes Farlock said 90 per cent of companies expect conditions in 2026 to remain stable and favourable, underscoring Malaysia’s reputation as a predictable and resilient economy.

“This cautious but hopeful outlook aligns with Malaysia’s continued attractiveness as a diversified, strategically positioned manufacturing and services hub in Southeast Asia,” he said in a statement.

Nearly half of the surveyed firms plan to expand their workforce in Malaysia over the next 12 months, while 36 per cent expect staffing levels to remain unchanged.

However, companies flagged several challenges that could weigh on business development next year, led by weak global demand, economic policy conditions, trade barriers and a lack of skilled labour.

Farlock said skilled labour shortages were cited by 37 per cent of respondents, highlighting growing pressure on talent availability as companies look to expand.

On the impact of United States trade policy, 54 per cent of German firms reported negative effects, while the remainder said they experienced no direct consequences.

This, Farlock said, was largely because nearly two-thirds of the surveyed companies have no business connections with the United States.