Services accounts for 56% of economy, growing 6.8% in 2018

By SHAHEERA AZNAM SHAH / Pic By TMR

Malaysia posted an economic expansion of 4.7% last year, lower than the 5.9% recorded in 2017. The country’s economy faced headwinds last year as the world grappled with geopolitical and trade skirmishes, worries of growth prospect and internal pressure of a changed government.

Following are the performance of the main sectors in 2018.

Services

The services industry accounts to 56% of the country economy. It expanded by 6.8% last year against 6.2% in 2017, supported by the wholesale and retail trade as well as the information and communication sub-sector. The sector grew 6.9% in the fourth-quarter of 2018 (4Q18), compared to 6.2% year-on-year (YoY).

Mining and Quarrying

The mining and quarrying sector contributed 7.9% to the country’s economy. The sector’s growth rebounded by 1.5% in 2018 compared to 1% in the previous year, buoyed by the recovery in the production of crude and condensate products, and improvements in the production of natural gas. The sector grew 0.5% in the 4Q18 against a negative 0.5% in the 4Q17.

Manufacturing

The manufacturing sector is the second-largest contributor to the economy, accounting for 22.8%. However, its growth narrowed to 5% last year compared to 6% in 2017, weighed by the manufacturing and repair of transport equipment. The sector grew 4.7% in the 4Q18, lower than 5.4% YoY. Export worries and global demand due to the trade war between the US and China continues to cast dark clouds over the country’s manufacturing demand.

Agriculture

Agriculture activities account for 7.9% of the economy. It continued to slumber in negative territory, posting a negative 0.4% last year compared to 7.2% in 2017. The sector also registered a negative 0.4% in the 4Q18 compared to a strong 10.7% YoY. Much of the drag was due to the lower performance of palm oil.

Construction     

The construction sector contributes 4.2% to economy. Its growth slowed to 4.2% last year compared to 6.7% in 2017. The sector’s quarter performance also mirrored the slowdown with 2.6% in the 4Q18 against 5.8% in the 4Q17. The growth was weighed down by its civil engineering sub-sector, which had recorded double-digit growth and was geared by the oil and gas and utilities related projects.