This article first appeared in The Edge Financial Daily, on March 24, 2016.

KUALA LUMPUR: The services and manufacturing sectors will remain as key drivers of overall growth this year, while growth in the construction sector is expected to be sustained, according to Bank Negara Malaysia’s Annual Report 2015.

The services sector will continue to expand in 2016, albeit at a more moderate rate. Growth in consumption-related sub-sectors such as retail trade, food & beverages and accommodation is anticipated to moderate in tandem with slower growth of private consumption.

Growth in the manufacturing sector is also expected to moderate in 2016 mainly due to slower expansion in the export-oriented industries. The expected softening in regional demand will affect the performance of the primary-related cluster.

While the electrical and electronics cluster will remain supportive of growth, the weakening demand from emerging-market economies and the strength of the US dollar are likely to weigh down on global demand for electronic goods.

Growth in the domestic-oriented industries is also expected to soften in line with weaker domestic demand conditions.

Growth momentum in the construction sector is projected to moderate slightly in 2016. In the residential sub-sector, the expansion is projected to remain modest amid weak housing approvals and property launches, while performance in the non-residential sub-sector is expected to be more moderate amid slower construction activity in the industrial and commercial property segments.

The overall performance of the construction sector, however, will be supported by new and existing multi-year civil engineering projects, particularly in the transport and petrochemical segments.

Despite the lower oil and gas prices, growth in the mining and quarrying sector will be supported by the introduction of new gas production capacity from the Train 9 liquefied natural gas production facility in Bintulu, Sarawak.

However, the agriculture sector is expected to record a marginal contraction due to the lower yields caused by the El Niño weather phenomenon.

In contrast, the information and communications sub-sector is expected to register robust growth as demand for data communications services remains strong.