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Finance

Malaysia’s MSMEs outgrew the national economy in 2025 with 5.7% growth

Malaysia’s micro, small and medium enterprises (MSMEs) grew 5.7% in 2025, beating the national GDP expansion of 5.2% and lifting their share of GDP to 39.7%.

Source: Human Resources Online · July 30, 2026 at 11:03 PM · AI-assisted report

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Malaysia’s MSMEs outgrew the national economy in 2025 with 5.7% growth
Photo: Padmanaba01 via flickr (BY-SA)

MALAYSIA, 31 JULY 2026 —

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Malaysia’s micro, small and medium enterprises (MSMEs) grew 5.7% in 2025, beating the national GDP expansion of 5.2% and lifting their share of GDP to 39.7%.

Market Impact

According to the Department of Statistics Malaysia’s (DOSM) 2025 MSME report, the sector generated RM689.8bn in value added, up from RM652.8bn in 2024.

The expansion was driven by Budget 2025 measures including financing schemes, tax incentives and entrepreneurship programmes aimed at raising productivity, accelerating digitalisation and widening market access.

Services and manufacturing together supplied 84.5% of MSME output. Services grew 5.7%, matching the prior year, led by wholesale and retail trade, food and beverage, accommodation, finance, insurance, real estate and business services, plus transport, storage and information technology.

Manufacturing expanded 4.8%, down from 5.0% in 2024, with food, beverages and tobacco up 9.6%, other manufacturing up 4.7% and non-metallic minerals, basic metals and fabricated metal products also up 4.7%.

Elsewhere, agriculture grew 1.8% while construction surged 12.0%, the fastest of all sectors. Mining and quarrying rose 4.4%.

MSME exports climbed 10.5% to RM214.5bn, slower than the 29.5% gain in 2024. Manufacturing exports rose 8.8% to RM132.7bn and services exports jumped 14.0% to RM78.2bn, giving MSMEs a 14.7% share of Malaysia’s total exports.

Within manufacturing, machinery and transport equipment, miscellaneous manufactured articles and manufactured goods made up 61.1% of exports. Singapore took 17.7%, the United States 15.1% and China 12.0%.

Agriculture exports edged up 1.0% to RM3.54bn, lifted by durian up 13.2%, other local fruits up 9.0% and vegetables up 0.2%, while fisheries and poultry exports declined.

MSME employment grew 1.5% to 8.09 million, from 7.97 million in 2024, lifting the sector’s share of national employment to 48.7%.

Services remained the largest employer, adding 4.0% to reach 5.30 million workers, driven by wholesale and retail, food and beverage, and accommodation. Construction MSMEs employed 685,000 people, 48.4% of the sector’s workforce, while manufacturing stayed flat at 1.30 million, 45.6% of the sector total.

Agriculture and mining MSMEs shed 0.3% of jobs, leaving 789,000 and 21,000 workers respectively.

Labour productivity rose 4.1% to RM85,299 per worker, from RM81,931 in 2024. Construction led with a 10.8% increase, followed by manufacturing at 4.8%, mining and quarrying at 4.7%, services at 3.5% and agriculture at 2.1%.

Related: Malaysia

Reporting based on Human Resources Online. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.