share on
Measured by value added per employee, labour productivity increased by 4.1% to RM85,299 per person, up from RM81,931 in 2024.
Malaysia's micro, small and medium enterprises (MSMEs) continued to strengthen their role as a key driver of the nation's economy in 2025, recording 5.7% GDP growth, outpacing Malaysia's overall GDP growth of 5.2%.
This is according to the Department of Statistics Malaysia's (DOSM) latest Micro, Small and Medium Enterprises, 2025 publication. The sector generated RM689.8bn in value added during the year, an increase from RM652.8bn in 2024, contributing 39.7% of Malaysia's GDP.
DOSM said the sector's positive performance was supported by government initiatives under Budget 2025, including financing facilities, incentives, and entrepreneur development programmes aimed at boosting productivity, accelerating digitalisation and innovation, and expanding market access for MSMEs.
Services and manufacturing remain the biggest growth drivers
The services and manufacturing sectors continued to support MSMEs' performance, together accounting for 84.5% of the sector's GDP.
The services sector maintained growth of 5.7%, matching the previous year's performance. The expansion was driven by continued growth in wholesale and retail trade, food & beverages, and accommodation (5.0%), finance, insurance, real estate & business services (6.6%), as well as transportation & storage, and information and communication (7.7%).
Meanwhile, the manufacturing sector expanded by 4.8%, slightly lower than the 5.0% recorded in 2024. Growth was led by food, beverages and tobacco (9.6%), other manufacturing (4.7%), and non-metallic mineral products, basic metals & fabricated metal products (4.7%).
Elsewhere, MSMEs in the agriculture sector grew by 1.8%, supported mainly by the rubber, oil palm, livestock and other agriculture sub-sector, which expanded by 2.3%.
Finally, the construction sector recorded the fastest growth among all sectors at 12.0%, while mining and quarrying increased by 4.4%.
Exports remain resilient, surpassing RM214bn
MSME exports rose by 10.5% in 2025 to RM214.5bn, although growth moderated from the 29.5% recorded in 2024.
Manufacturing and services remained the key contributors, growing by 8.8% and 14.0% respectively. Overall, MSMEs accounted for 14.7% of Malaysia's total exports in 2025.
Within manufacturing, exports increased from RM122.0bn in 2024 to RM132.7bn in 2025. Machinery & transport equipment, miscellaneous manufactured articles, and manufactured goods together made up 61.1% of total manufacturing exports by MSMEs.
Singapore remained the largest export destination for MSME manufacturers, accounting for 17.7% of exports, followed by the United States (15.1%) and China (12.0%).
Meanwhile, MSMEs in the services sector continued to build on strong export momentum. Export value increased from RM68.6bn in 2024 to RM78.2bn in 2025, following a sharp rise from RM33.2bn in 2023. DOSM attributed the growth largely to travel, as well as telecommunications, computer, and information services.
Agriculture exports edged up 1.0% to RM3.54bn, supported by higher exports of durian (13.2%), other local fruits (9.0%), and vegetables (0.2%). However, exports of fisheries, including ornamental fish, as well as chicken and duck products, declined during the year.
Nearly half of Malaysia's workforce is employed by MSMEs
Per the report, MSME employment continued to grow in 2025, although at a slower pace – the numbers rose by 1.5% to record 8.09mn people, up from 7.97mn in the previous year.
As a result, MSMEs accounted for 48.7% of Malaysia's total employment, up slightly from 48.5% in 2024.
The services sector remained the largest employer, accounting for 50.9% of total employment in the sector. Employment rose 4.0% to 5.30mn people, driven mainly by wholesale and retail trade, food and beverage, and accommodation activities.
The construction sector employed 685,000 people, representing 48.4% of total employment in the sector, while Manufacturing employment remained broadly stable at 1.30mn people, accounting for 45.6% of the sector's workforce.
Meanwhile, employment in the agriculture and mining & quarrying sectors declined marginally by 0.3%, with MSMEs employing 789,000 and 21,000 people respectively.
Labour productivity improves across all sectors
Alongside employment growth, labour productivity among MSMEs also strengthened in 2025. Measured by value added per employee, labour productivity increased by 4.1% to RM85,299 per person, up from RM81,931 in 2024.
Overall, every economic sector recorded productivity gains during the year. Construction posted the strongest increase at 10.8%, followed by manufacturing (4.8%), mining and quarrying (4.7%), services (3.5%), and agriculture (2.1%).
Infographic / DOSM
share on
