SME contribution to Malaysian GDP rises to 38.3%, valued at US$126.3b
By Digital News Asia August 2, 2019
- Services and manufacturing are major contributors with combined share of 82.4%
- SME exports increased to RM171.9 billion in 2018 from RM166.2 billion in 2017
OVERALL performance of small and medium enterprises (SMEs) in Malaysia is on track to achieve the target of 41% to GDP by 2020 as envisaged under the Dasar Keusahawanan Nasional 2030 (DKN 2030) recently launched by the Ministry of Entrepreneur Development.
SMEs recorded a higher contribution of 38.3% to GDP in 2018 amounting to US$126.3 billion (RM521.7 billion) as compared to 37.8% amounting to US$117.9 billion (RM491.2 billion) in 2017.
Based on data released by the Department of Statistics Malaysia (DOSM) on Aug 1, SMEs registered a growth of 6.2% in 2018 (2017: 7.1%), slightly above the long-term average growth of 6.0% (2001 - 2017).
SME GDP growth continued to outperform overall GDP growth of 4.7% in 2018 (2017: 5.7%).
In terms of sectoral contribution, the services and manufacturing sectors continued to be the major sectoral contributors with a combined share of 82.4% in 2018.
SME value-added in services sector registered a strong growth of 8.1% in 2018 (2017: 7.2%), the highest pace since 2014.
The growth was driven primarily by the wholesale & retail trade, food & beverages and accommodation sub-sectors as consumer spending improved in particular during the three-month (June 1 – Aug 31, 2018) zerorisation of the Goods and Services Tax (GST) rate period.
The higher value-added growth of SMEs in the services sector was also supported by the finance, insurance, real estate and business services sub-sectors which increased by 7.6% (2017: 7.4%), as well as the transportation & storage and information & communication sub-sectors which expanded by 6.9% (2017: 6.8%).
In the manufacturing sector, value-added of SMEs expanded by 5.5% (2017: 6.8%), led by non-metallic mineral products, basic metal & fabricated metal products as well as petroleum, chemical, rubber and plastic products.
In terms of exports, SMEs showed a strong resilience by recording a growth of 3.4% in 2018 (2017: 7.2%), despite a significant slow-down in the growth of large firms at 3.6% in 2018 (2017: 17.0%).
In value terms, SME exports increased to RM171.9 billion in 2018 from RM166.2 billion in 2017, while the share to overall exports remained at 17.3% (2017: 17.3%).
The export growth momentum was supported by SMEs in the manufacturing sector, particularly in manufactured goods and chemicals products.