ENG-2004 — Page 77

The Economy | 47

The Services Sector

The services sector has not only flourished but also diversified in types of activities, concomitant with the structural transformation of the economy. 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 distinctly over the past two decades. Strong expansion was also observed in information technology in recent years, especially telecommunications services and Internet applications, in line with the shift. in economic structure towards more knowledge-based activities.

Exports and imports of services both grew by an annual average of 7 per cent in real terms over the past two decades. In 2004, civil aviation, travel and tourism, trade-related services, and various financial and banking services were the largest components of trade in services. Within exports of services, offshore trade and merchandising services remained the most important component in 2004, accounting for 35 per cent of the total value in that year. For transportation, the corresponding share was 32 per cent. This was followed by travel and tourism (with a share of 17 per cent), and financial and banking services (6 per cent). As to imports of services, travel and tourism remained the largest component, accounting for 45 per cent of the total value in 2004. Transportation ranked next (with a share of 27 per cent), followed by offshore trade and merchandising services (8 per cent), and financial and banking services (3 per cent).

Between 1993 and 2003, net output or value added of the services sector as a whole rose visibly, by an annual average of 4 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 7 per cent). This was followed by transport, storage and communications (4 per cent); the wholesale, retail and import/export trades, restaurants and hotels (3 per cent); and finance, insurance, real estate and business services (2 per cent).

In 2003, 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 (23 per cent), community, social and personal services (22 per cent), and transport, storage and communications (11 per cent) (Chart 4).

In terms of employment, the wholesale, retail and import/export trades, restaurants and hotels were the largest sector, accounting for 32 per cent of the total in 2004. This was followed by community, social and personal services (with a share of 27 per cent), financing, insurance, real estate and business services (15 per cent), and transport, storage and communications (11 per cent) (Chart 5).