Employment in SMEs accounted for 7.25mn people in the year, which is 65,000 less than in 2019. This, DOSM noted, indicates a significant impact of the COVID-19 crisis on SMEs.

Malaysia saw a drop in the share of small and medium enterprise (SME) employment in 2020, the first following years of persistent increases, the Department of Statistics' latest report has shown. 

According to the report [Small and Medium Enterprises (SMEs) Performance 2020], the share stood at 48% in 2020, a 0.9% decrease from previously. In specifics, this means SME employment accounted for 7.25mn people in the year, 65,000 less than in 2019 (7.32mn).

This "larger decline in SME employment as against a decrease in Malaysia or national employment during the year, indicating SMEs was hit significantly by the COVID-19 health crisis," DOSM noted.

Prior to 2020, the average annual change of SME employment was 3%, or with an addition of 200 thousand persons annually.

A break down of SMEs employment by sector

Per the report,  employment in SMEs in the agriculture sector contributed 41.8% in 2020 (2019: 41.4%) of the overall employment in this sector, comprising 779,000 people. Agriculture was the only sector that posted a positive growth during the year, albeit at a slower rate of 0.5% (2019: 1.8%).

Over in mining & quarrying, the sector posted a marginal increase to 28.3% (2019: 28.1%). However, it still recorded a lower number of SME employment, by 1.3% (2019: 2.1%), to record 21,000 employed people in 2020.

Meanwhile, 1.19mn people were employed in manufacturing sector SMEs, which constituted 46.5% of the total employment in the sector (2019: 46.7%). Here, the number of SME employment saw a marginal drop by 0.4% in 2020, against a positive growth of 2.2% in 2019.

That said, while the sector saw a drop in its number of SME employment during the year, two sub-sectors posted an increase - petroleum, chemical, rubber and plastic products (1.5%), and food, beverages and tobacco (1.0%).

Next, the construction sector saw a decline in SME employment for a second year, at -4.9%, after registering a drop of 3.4% in 2019. SMEs employment in this sector accounted for 48.1% of total employment, with 673,000 employed people.

Finally, the services sector saw 4.59mn people employed in 2020, contributing 49.9% of the overall employment in the sector. In terms of annual percentage change, SME employment in this sector plunged 0.6% in the year, compared to a positive growth of 4.4% in 2019.

Further, all sub-sectors here posted a decline in 2020, except for finance, insurance, real estate and business services, which saw a 0.5% increase (2019: 3.0%).


Images / DOSM

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