Services sector to get a boost by 2019: analyst

Cloud storage, corporate broadband, and ICT adoption could step up process efficiencies.

The services industry’s growth will further expand in 2019 baked by the finance & insurance and business services sectors, RHB said. This growth will be bolstered by new developments in the digital services, they added.

“New technologies in cloud storage, corporate broadband and ICT adoption are likely to enhance process efficiencies,” they explained. “In addition, healthy growth in insurance services coming from domestic and regional demand would also support the sector.”

On domestic-oriented sectors, positive contribution from the firm labour market environment would help to buoy consumer discretionary spending.

“This is expected to support the wholesale & retail trade sectors, as well as accommodation & food services,” they noted. “In addition, higher expected visitor arrivals will provide an added boost.”

However, RHB thinks that the weakened external outlook could likely dampen trade-related services. With this, the transportation & storage sectors may ease down growth amidst slowdown in global trade activities and the decrease in trans-shipment volumes.

Despite this, the e-commerce boom could uplift demand for ground logistics.