The services sector in Malaysia covers all economic activities that are not covered by the agriculture, construction, manufacturing, and mining and quarrying sectors. The services sector is the largest economic sector in Malaysia.
In 2017, the Gross Domestic Product at factor cost (“GDP”) of the services sector was valued at MYR638.8 billion (constant 2010 prices). The services sector contributed 55.2% to Malaysia’s GDP of MYR1,156.7 billion in 2017—more than half the GDP of Malaysia. Between 2010 and 2017, the GDP of the Malaysian services sector registered a 6.2% average year-on-year growth rate. Compared to the other primary sectors—agriculture, construction, manufacturing, mining and quarrying—the Malaysian services sector was the second fastest growing sector after construction (9.6% average year-on-year growth rate) from 2010 to 2017.
Given the size and diversity of the services sector in Malaysia, categorization can be a challenge. Nevertheless, the services sector can be broadly categorized into the following subsectors.
- Electricity and gas services.
- Water, water treatment, and sewerage services.
- Wholesale trade.
- Retail trade.
- Automotive trade.
- Food services.
- Accommodation services.
- Information and communication services.
- Financial services.
- Insurance services.
- Real estate and business services.
- Government services.
- Other services.
Excluding government services, in 2017, the wholesale trade and retail trade subsectors contributed 12.5% (or MYR80.0 billion) and 12.1% (or MYR77.0 billion) respectively to the GDP of the Malaysian services sector, the two largest among all subsectors, followed by the information and communication services subsector (11.1% or MYR71.0 billion). In terms of GDP growth, the information and communication services subsector grew the fastest among all subsectors, registering an average year-on-year growth rate of 8.7% from 2010 to 2017; the wholesale trade and retail trade subsectors registered an average year-on-year growth rate of 7.1% (5th fastest) and 7.5% (2nd fastest) respectively.
In 2017, there were an estimated 765,000 establishments within the Malaysian services sector, employing approximately 9.0 million people across all occupation levels. The mean and median salaries of employed persons within the Malaysian services sector in 2017 across all occupation levels were estimated to be about MYR3,100 and MYR2,600 per month respectively.
The growth of the services sector in Malaysia has remained relatively stable over the past 7 years. Between 2010 and 2017, the average year-on-year GDP growth rate of the Malaysian services sector hovered around 6.2% (2010—2017), 5.9% (2013—2017), and 6.2% (2016—2017). Based on the historical growth trend of the Malaysian services sector between 2010 and 2017, the GDP of the Malaysian services sector is projected to grow by 5.9% to MYR676.7 billion in 2018.
Services sector: The services sector includes all other economic activities that are not covered by the other primary sectors, such as electricity, gas, steam and air conditioning supply; water supply; sewerage, waste management and remediation activities; wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities; information and communication; financial and insurance activities; real estate activities; professional, scientific and technical activities; administrative and support service activities; education; human health and social work activities; arts, entertainment and recreation; and other service activities.
Establishments: Establishments include individual proprietorships, partnerships, limited liability partnerships, private limited companies, public limited companies, co-operatives, and public corporations.
Occupation levels: Occupation levels include skilled (managers, professionals, technicians and associate professionals), semi-skilled (clerical support, plant and machine operators, etc.), and low-skilled (elementary occupations).