KUCHING: Rising business costs are beginning to work their way through Sarawak’s supply chain and into consumer prices.
Sarawak Business Federation (SBF) Secretary-General, Datuk Jonathan Chai, said businesses in the state were already feeling the impact of rising costs, with the pressure becoming increasingly visible across several key areas.
He said the most immediate impact was seen in construction and property development, as well as logistics and transportation.
“Construction materials, together with higher fuel-related costs, particularly in aviation surcharges and freight, were directly increasing the cost of moving goods into and within Sarawak.
“This was especially significant given the state’s geographical realities and its reliance on air and sea connectivity,” he told Sarawak Tribune.
At the same time, he said sectors linked to food production and agriculture were experiencing rising input costs, including fertilisers and other essential materials.
“This was gradually feeding into higher food prices and retail costs, affecting both businesses and consumers.”
In short, he said the cost pressures were not isolated.
“They were cascading through the entire supply chain, from importation to production and ultimately to the end consumer.”
On the 50 per cent rental discount, Chai said it was certainly a timely and targeted relief, particularly for small traders, hawkers and micro-enterprises operating in government-owned premises.
“For this group, rental was a fixed monthly cost, so the reduction provided immediate cash flow relief,” he said.
However, he said it was important to recognise that rental was only one component of overall business costs.
“Many businesses today were more heavily impacted by variable costs such as raw materials, transportation, utilities and imported goods.
“As such, while the rental discount would help ease short-term pressure, the broader cost burden driven by external global factors remained significantly larger.
“The measure should therefore be seen as part of a wider support framework, rather than a complete solution,” he said.
If current global pressures persisted, he said businesses in Sarawak were likely to adopt a combination of approaches.
“Many businesses, especially SMEs, would try to absorb increased costs initially to remain competitive.”
However, this would not be sustainable over a prolonged period.
He said uncertainty in operating costs could also lead businesses to adopt a more cautious stance, postponing expansion, hiring or capital investment.
“If cost pressures continued or intensified, some degree of price adjustment would become unavoidable, particularly in sectors with thin margins such as food and retail,” he said.
Ultimately, Chai said the response would vary by industry, but the general trend was clear.
“Prolonged external shocks would gradually translate into higher prices and slower business expansion unless mitigated by continued policy support,” he said.
He said the measures announced by the Sarawak Government demonstrated a proactive and responsive approach in cushioning the immediate impact of global uncertainties.
“Moving forward, continued monitoring and adaptive interventions would be crucial to ensure that both businesses and consumers remained resilient in the face of ongoing external pressures.”
