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With regards to employment, the rail industry saw its workforce shrink at a CAGR of 3.4%, from 15,890 persons in 2019 to 14,244 persons in 2022 due to the COVID-19 pandemic's impact on projects and passenger traffic.
Malaysia's Ministry of Investment, Trade and Industry (MITI) has shared its plans for the rail industry under the NIMP 2030 framework. As a refresher, the NIMP 2030 serves to:
- Provide national strategic direction to lead the industrial development policies,
- Be a conversation piece for investors and other economies on Malaysia’s position and direction, and
- Feature the role of the Malaysian Government in shaping the economy.
This article will focus on the opportunities and potential avenues for growth that the rail industry can leverage during the NIMP 2030 period.
Trends and opportunities
The global rail transportation market size is expected to reach RM3.1tn by 2030. Factors contributing to this growth include:
- Increasing demand for sustainable transportation solutions,
- Growing urbanisation and industrialisation,
- Government initiatives to promote rail transportation, and
- Technological advancements in the rail industry.
With this prospective growth, more opportunities were created for the country to expand and strengthen the local industry.
Projects in the rail industry has contributed to the growth of the industry, such as:
- East Coast Rail Link,
- Klang Valley MRT3 Circle Line,
- Johor Bahru — Singapore Rapid Transit System (RTS Link),
- Light Rapid Transit (LRT) Penang, and
- Sarawak Autonomous Rapid Transit (ART).
These projects stimulate economic growth, create job opportunities and drive demand for components and services across different sectors such as electrical and electronics (E&E), telecommunications and power systems. As the rail industry progresses, new technologies or processes in other mature industries such as E&E, automotive and aerospace can be developed in alignment with rail project objectives.
Strategies and action plans
During the period of NIMP 2030, the rail industry aims to continue:
- Enhancing capabilities of the Malaysian rail industry to be competitive by moving into higher value activities, and
- Stimulating the industry by increasing private sector involvement and financing support from the Government.
Below are the action plans which are guided by the Malaysian Rail Supporting Industry Roadmap 2030:
To note:
- AP1 and AP2 align with NIMP 2030's mission #1, to advance economic complexity through developing an entire ecosystem that supports high value-added activities.
- AP3 will also align with mission #1, through the Foster Research, Development, Commercialisation and Innovation (RDCI) ecosystem.
- AP4 will align with mission #3, to push for new zero, via catalysing new green growth areas.
- AP5, on the other hand, is sector specific.
Performance
The industry’s value-added (GDP) between 2010 to 2022 is recorded below:
During the IMP3 period, the industry’s GDP contribution has grown by a Compound Annual Growth Rate (CAGR) of 7.2% from RM0.5bn in 2010 to RM1.3bn in 2020. In 2021 and 2022, the industry’s GDP contribution declined by 13.9% and then grew 17.6% to RM1.2bn and RM1.4bn respectively.
Employment
The rail industry's employment declined by a CAGR of 3.4%, from 15,890 persons in 2019 to 14,244 persons in 2022. This decline of the employment can be attributed to the COVID-19 pandemic which caused a decline in passenger traffic and suspension of construction projects.
Labour productivity
Between 2019 to 2022, the labour productivity of the industry grew by a CAGR of 3.1% from RM86,983 (2019) to RM95,761 (2022). Overall, the growth in labour productivity was driven by the adoption of new technologies to automate tasks in the areas of operations and maintenance.
For more information on how the rail industry performed, click here.
In a separate Facebook post on 27 November, MITI sai the four tiers — MRO Services, Components and Parts Manufactures, Major Systems and Sub-systems Integrators, and Final Integrator – Complete Train — will provide many opportunities for graduates and skilled workers to venture into the high-tech sector.
Infographics / NIMP 2030 rail industry
Lead image / MITI Facebook
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