Services sector declines 8.7 per cent in 3Q

KUALA LUMPUR: The services sector in the third quarter (3Q) of 2021 recorded RM391 billion in revenue, or negative growth of 8.7 per cent year-on-year, according to the Statistics Department (DOSM).

In its Quarterly Services Statistics 3Q report, chief statistician Mohd Uzir Mahidin said the decline was attributed to wholesale and retail trade, food and beverage (F&B), and accommodation segments, which decreased 9.5 per cent to RM313.3 billion.

This was followed by the private health, private education, arts, entertainment, and recreation segments which dropped 21.4 per cent to RM10.9 billion.

“Comparison of the performance by sub-sector showed that the wholesale and retail trade sub-sector recorded the highest decline with a decrease of RM30.2 billion or 9.1 per cent year-on-year.

“This was followed by the arts, entertainment and recreation as well as the transportation and storage sub-sectors, which dropped 80.6 per cent and 12.3 per cent, respectively, to record RM700 million and RM21.3 billion in 3Q,” said Mohd Uzir.

For quarter-on-quarter (q-oq) comparison, total revenue in 3Q contracted by 3.3 per cent, with a decrease of RM13.5 billion. The decrease was also propelled by wholesale and retail trade, as well as the arts, entertainment and recreation sub-sectors, which declined 3.4 per cent, and 66.4 per cent, respectively.

The number of persons engaged in this sector, which was 3.7 million persons, declined by 32,334 persons or 0.9 per cent year-on-year.

The loss of jobs was attributed to the F&B subsector with a decrease of 11,548 persons or 1.4 per cent, followed by the arts, entertainment and recreation sub-sector, which let go 8,176 persons or 18.8 per cent.

“However, the number of persons engaged rose 1.0 per cent quarter-on-quarter or increased by 34,663 persons as against the previous quarter,” he added.

Mohd Uzir noted that salaries and wages paid also registered a decrease of RM630.8 million, falling 2.6 per cent year-on-year.

The decrease was due to a contraction in the transportation and storage sub-sector, which dropped 7.9 per cent to record RM2.3 billion, followed by the information and communication sub-sector, which declined 7.7 per cent to post RM2.1 billion.

For q-o-q comparison, salaries and wages grew 1.8 per cent to register RM24.1 billion in the third quarter of 2021.

“The weak performance of the services sector in 3Q indicates that Malaysia is still battling the impact of the Covid-19 pandemic.

“Nevertheless, the rollout of the National Vaccination Programme and the country’s preparations for the transition to the Covid-19 endemic phase are seen to jump-start economic recovery in the coming quarters,” he added.