Malaysia's services exports reached an all-time high by recording RM169.8 billion with a growth of 4.6 per cent in 2019, boosted by favourable performance in travel, air transport and professional services, according to the Department of Statistics, Malaysia (DOSM).

DOSM's Statistics of International Trade in Services (SITS) 2019 showed imports increased marginally at 0.5 per cent to RM180.7 billion from RM179.9 billion in 2018, led by outbound activities and business services.

Trade balance continued to register a deficit for the past eight years after registering the last surplus in 2011.

"The exceptional performance of exports and lower imports of construction activities have contributed to a narrower trade deficit in services to RM10.9 billion from RM17.5 billion in 2018, the lowest since 2015," chief statistician, Datuk Seri Dr Mohd Uzir Mahidin said in a statement today.

He said Malaysia's total trade in services, which made up 23.2 per cent of gross domestic product for 2019, increased 2.4 per cent to RM350.5 billion from RM342.3 billion in 2018.

Travel remained as the largest component by contributing almost half of total exports with 48.4 per cent share or RM82.1 billion.

"This was in line with the number of tourist arrivals to Malaysia that boomed over the years to record 26.1 million in 2019, precisely from Singapore, Indonesia and China that witnessed a significant growth in tourism spending mainly on shopping, accommodation and food and beverages.

"At the same time, with the flourishing travel industry globally, there were no exceptions for Malaysians to travel abroad and the trend eventually becoming a lifestyle among the middle to higher income groups," Mohd Uzir said.

He said economical flights with good connectivity across destinations were also instrumental in making outbound travel a norm among Malaysians, raking in RM51.3 billion with an annual increase of 5.3 per cent for the past five years, from RM41.7 billion in 2015.

Improved exports in services were also supported by the rising volume of international air passengers with the expansion of low-cost carriers and direct flights to international routes resulting in higher air transport exports of RM12.7 billion.

Sea transport expanded to RM7.1 billion supported by higher merchandise exports for freight although at the same time imports of transport decreased due to continuous decreasing activities in freight.

Overall, Mohd Uzir said, transport performed well and registered a lower deficit at RM25.9 billion as compared to RM27.7 billion in 2018.

In regard to business services, he said the industry performed quite well in 2019, owing to higher exports in management and consulting; architectural, engineering and technical services and accounting services.

DOSM's statistics further showed that in 2019, personal, cultural and recreational services posted a lower deficit at RM1.0 billion, attributed to higher exports of RM2.4 billion, and driven by the expansion of the gaming industry to a new trend known as Electronic Sports (eSports), competition using video games.

Meanwhile, Singapore remained as the main destination for Malaysia's exports by registering RM41.5 billion in 2019.

"The leading markets for travel were Singapore, China and Indonesia, while exports on manufacturing services were mainly to US. As for India, the exports were predominantly on transport activities.

"In 2019, the top importing countries were from Singapore, China, US, United Kingdom and Thailand. The payments to Singapore, China and Thailand were mostly on travel while payments to US and UnitedKingdom were primarily for business services," said Mohd Uzir.

As for Malaysia's international trade in services in 2019, he said the statistics showed a growing demand in non-traditional market segments.

"The emerging market of eSports was noticeably growing in the country besides air transports, computing services and professional consulting services.

"With that, the country is on the right track in leveraging its international services exports by expanding supply of these services worldwide," he noted.

The chief statistician said Malaysia may see lower exports of services in 2020 amidst the uncertainty due to the COVID-19 pandemic and implementation of the Movement Control Order (MCO).

"All this while, Malaysia's services exports were too concentrated on travel but with the new norm of COVID-19, the tourist and hospitality industries may severely be affected this year.

"Thus, diversifying and identifying niche industries are pertinent in the current scenario to withstand Malaysia's exports of services," he added.

-- BERNAMA