Its president Tan Sri Soh Thian Lai said while the move to reopen applications was welcome, labour shortages were not confined to only those sectors.
“We welcome the government’s decision to reopen applications, but shortages are not confined to just these sectors.
“They are widespread across almost all industries.
“The most foreign labour-reliant remain manufacturing, construction and plantation,” he said in a statement. His remarks came after Home Minister Datuk Seri Saifuddin Nasution Ismail announced that applications for foreign worker employment quotas in three main sectors, namely, agriculture, plantations and mining, as well as in 10 selected subsectors on a case-by-case basis, are now open until Dec 31.
Saifuddin said that for the agriculture, plantation and mining sectors, applications for foreign workers would be allowed for all subsectors under these categories.
Soh said within manufacturing, subsectors such as furniture, rubber products, food processing and electrical and electronics (E&E) support services were facing the most urgent manpower needs.
He said surveys among FMM members had found labour shortages were putting significant pressure on business growth and the long-term viability of operations in Malaysia.
“These shortages are not limited to the sectors announced by the government, but cut across almost all economic industries.
“It is therefore highly concerning that existing manufacturers have been excluded from consideration.
“Many are facing critical manpower challenges due to workers returning home at the end of their contracts, the inability to replace workers because of the prolonged freeze, and, most critically, the increasing orders arising from strong domestic and export demand,” he said.
Soh said that excluding existing manufacturers from quota approvals risked undermining production continuity, deterring reinvestments and weakening Malaysia’s competitive position in global supply chains.
Currently, only manufacturing businesses involving new investments under the Malaysian Investment Development Authority (MIDA) are allowed to apply for quotas.
He pointed out that the manufacturing sector grew 3.7 per cent in the second quarter of 2025, while manufactured exports rose 5.2 per cent to RM656.56 billion in the first half of the year.
“This growth is powered not only by new investments but also by existing manufacturers who continue to expand capacity, fulfil export orders and reinvest in Malaysia, backed by strong demand for E&E, machinery, processed food and other goods.
“Thus, excluding them from case-by-case approvals risks stalling momentum and undermining Malaysia’s trade performance,” Soh said.
He also warned that restricting the supply of foreign workers would likely have cost implications.
“If supply is restricted, operating costs will rise, projects may be delayed, and output reduced.
“Malaysia’s investment competitiveness could also be affected.”
Soh said that employing foreign workers was neither cheap nor easy, given rising recruitment costs, policy uncertainty and the need for compliance with stringent ESG and international certification standards.
“The balance is crucial. Protecting local employment is important, but industries must also have timely access to foreign workers in jobs where locals are unwilling.
“Malaysia’s manufacturing sector remains a vital engine of growth.
“To sustain this momentum, the government must adopt a balanced, transparent and inclusive approach to foreign worker management that supports both new and existing investors.”