JOHOR is anticipated to become Malaysia’s next growth engine as it is fueled by the Johor-Singapore Special Economic Zone (JS-SEZ) and the Special Financial Zone (SFZ) in Forest City.

According to RHB Investment Bank, government-led catalytic development and foreign investment are expected to boost various sectors. 

This includes construction, data centres, energy, petrochemical, industrial, and tourism. It is also expected to have a positive impact on the property market.

“We believe Johor’s economic growth will continue to exceed the national average, driven by its robust manufacturing sector, sustainable strength in its service industry, advantageous location and well-developed infrastructure, as well as supportive policies from the state and federal governments.

“Johor has a well-developed infrastructure including port, airport, road network and utilities, equipped with competitive business operating costs,” the bank said in an Invest Johor market survey report.

The state is currently ranked as Malaysia;s third economic contributor behind Selangor and Kuala Lumpur. 

It is also the second largest contributor to national trade and contributes 9.5% of the country’s Gross Domestic Product (GDP). In 2023, Johor contributed 29% or RM753.1 billion to the country’s total trade.

RHB Investment stated that Johor’s GDP growth outpaced Malaysia’s by 4.1% in 2023 which was primarily driven by the services and manufacturing sectors which accounted for 84% of Johor’s GDP.

“Johor’s service sector has experienced the fastest growth among Malaysian states over the past five years.

“Several economic and demographic factors are driving the service sector in the state, among which consumer spending and retail trade are boosted by the rise of the middle class and increase in per capita income,” it added.

The bank also acknowledged that major ports like Tanjung Pelepas Port (PTP) and Johor Port in the state facilitate export and import activities.

PTP is Malaysia’s busiest port and largest transshipment hub which handles most containers and serves as the main gateway for regional and global trade.

Moreover, RHB Investment Bank shared that Johor remains the top investment destination in Malaysia for 2023 which has attracted significant interest from both domestic and international investors.

“The state’s attractiveness is driven by its robust infrastructure such as ports and road networks while being equipped with utility services and abundant workforce.

“In 2023, the Malaysian Investment Development Authority (MIDA) approved 751 projects in Johor totaling RM43.1 billion, contributing 13 percent of the national figure. These projects are expected to create 19,053 new jobs,” it said.

Johor’s manufacturing output in 2023 grew by 2.8% YoY, surpassing the national average. This is supported by diverse sectors, foreign direct investment and strengthening industrial parks.

“This key economic zone is designed to attract high-value industries and global investors, offering tax incentives, dedicated business parks and a business-friendly regulatory environment,” it said. — TMR