Malaysian firms are being forced to reject orders and are set to lose billions in sales due to a shortage of over a million workers.

Although the Covid-driven ban on recruiting foreign workers was lifted in February, there hasn’t been a substantial return of migrant workers to Malaysia due to sluggish government approvals and lengthy negotiations with Bangladesh and Indonesia over workers protections.

"Our main focus is our workers' welfare and rights," stated Bangladesh's expat welfare and overseas employment minister, Imran Ahmed. "We're making sure they get standard wages, they have proper accommodation, they spend minimum cost for migration and they get all other social security."

Manufacturers in Malaysia, who account for almost 25% of the country’s economy, are concerned about losing customers to other countries as growth rebounds, Reuters reports.

"Despite the greater optimism in outlook and increase in sales, some companies are gravely hampered in their ability to fulfil orders," said Soh Thian Lai, president of the Federation of Malaysian Manufacturers, which represents more than 3,500 companies.

There is a shortage of over 1.2 million workers across Malaysia’s manufacturing, plantation and construction sectors, which is being exacerbated as demand increases with the pandemic restrictions easing, according to industry and government data.

In May, Malaysia's manufacturing Purchasing Managers' Index fell to 50.1 from 51.6 in April, as the sector lost the highest number of jobs since August 2020, according to data from S&P Global.

Wong Siew Hai, president of the Malaysia Semiconductor Industry Association said chip manufacturers are having to turn away customers, locals have no interest in working within the industry and those who do leave within six months.

Malaysia’s Minister of Human Resources, M. Saravanan said firms had requested to employ 475,000 migrant workers, yet just 2,065 were approved by the Ministry, due to incomplete information or a lack of compliance with regulations.