48 The Economy
The Service Sector
The service sector has not only flourished but also diversified to match economy's structural transformation. Trade-related and tourism-related services, community, social and personal services, and finance and business services such as banking, insurance, real estate and a host of related professional services, have all grown significantly over the past two decades. Information technology (IT) has also expanded considerably in more recent years
especially IT related to telecommunications services and Internet applications economic structure towards more knowledge-based activities.
in line with the shift in the
Between 1994 and 2004, the net output of the service sector as a whole rose by an annual average of 3 per cent in value terms. Among the major constituent sectors, net output of community, social and personal services had the fastest growth (at an average annual rate of 6 per cent). This was followed by the wholesale, retail and import/export trades, restaurants and hotels; and transport, storage and communications (both at 4 per cent); and finance, insurance, real estate and business services (1 per cent).
In 2004, the wholesale, retail and import/export trades, restaurants and hotels continued to be the largest service sector, accounting for 27 per cent of value added contribution to GDP. This was followed by finance, insurance, real estate and business services (21 per cent), community, social and personal services (21 per cent), and transport, storage and communications (10 per cent) (Chart 4).
Chart 4
Gross Domestic Product by major service sector
1984
Wholesale, retail and
import/export trades,
21.7%
Transport, storage and communications 7.4%
Finance, insurance, real estate and business services
14.5%
restaurants and hotels
Transport, storage and communications
10.1%
2004
Wholesale, retail and import/export trades, restaurants and hotels 27.5%
Others 20.2%
Community, social and personal services 15.1%
Others 41.3%
Finance, insurance, real estate
and business services 21.2%
Community, social and personal services 21.0%
Community, social and personal services showed a more distinct increase in value-added than other major service sectors over the past two decades. The wholesale, retail and import/export trades, restaurants and hotels, and finance, insurance, real estate and businesses services, remained the two largest service sectors in terms of net output in 2004.
The profound structural change in the economy was paralleled by a shift in the sectoral composition of employment. Over the past two decades, the service sector's share in total employment went up from 54 per cent in 1985 to 78 per cent in 1995