KUALA LUMPUR (May 13): Malaysia's service sector, which accounts for about half of the economy, grew by 6% year-on-year (y-o-y) to RM630 billion in the first quarter of 2025 (Q1 2025), driven by consumer spending, tourism and increased demand for digital and professional services, according to the Department of Statistics Malaysia.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin highlighted that all sectors within services experienced growth. The wholesale, retail, food and beverage, and accommodation segments saw a 5.3% rise to RM475.7 billion, fuelled by higher spending during key events like Chinese New Year, Ramadan and Aidilfitri, along with increased local travel and a 31.3% boost in tourist arrivals.

The information, communication and transport sectors expanded by 5.9% to RM87.9 billion, driven by growing demand for digital services and a 3.8% rise in telecommunications. Air travel and passenger traffic saw increases of 9.2% and 11.8% respectively while courier and delivery services grew due to the ongoing rise in e-commerce.

The professional, real estate and administrative services segment grew 10.4%, led by demand for engineering, accounting and architectural services, as well as more real estate activity. Real estate specifically grew 13.5%, helped by stable interest rates and government support for housing. Travel agencies saw a 13% rise and office services grew by 16.9%.

The private healthcare, education, arts, entertainment and personal services sector expanded by 11.1%. Healthcare services saw over 14% growth, driven by demand for wellness and preventive care, while private education rose 7%. Arts and entertainment grew 12.1% and personal services, including grooming and laundry, saw a 9.9% increase.

E-commerce income reached RM310.6 billion in Q1 2025, marking a 3.4% y-o-y increase, with a slight 0.1% growth from the previous quarter.

Mohd Uzir also reported that 4.5 million people were engaged in the sector, up 1.9% from last year, with the transport & storage sector leading the growth. Salaries and wages in the services sector rose 4.1% y-o-y to RM33.6 billion, with quarterly growth of 1.0%.