By Datuk Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: Sabah’s sharp improvement in GDP in 2025 reflects a broad based economic rebound, with logistics and transport quietly underpinning growth in services, mining, manufacturing, and construction.
A coherent transport masterplan can turn this enabling role into a deliberate growth engine, pushing Sabah from recovery towards structurally higher, more inclusive and competitive economic performance.
(https://www.freemalaysiatoday.com/category/nation/2026/07/02/sabahs-economy-up-5-1-in-2025)
Narrative: Sabah’s GDP rebound and the quiet role of logistics
After a sluggish 1.2% growth in 2024, Sabah’s economy accelerated to 5.1% in 2025, adding RM4.3 billion to reach RM88.8 billion in current price GDP.
This rebound brought Sabah broadly in line with Malaysia’s national growth of 5.2%, signalling that the state is no longer lagging as severely behind the national trajectory as it did previously.
The structure of Sabah’s economy in 2025 was dominated by services, mining and quarrying, which together accounted for 74.1% of GDP, followed by agriculture (13.9%), manufacturing (7.2%) and construction (4.4%).
Each of these sectors is deeply dependent on transport and logistics, even though official statistics do not always single logistics out as a standalone sector.
Services grew by 4.5%, supported by tourism related activities such as wholesale and retail trade, accommodation, food and beverage services and government services—all of which rely on inbound flows of goods, efficient distribution, and reliable passenger transport to function effectively.
Mining and quarrying rebounded by 4.9% after a 4.9% contraction the year before, driven by higher production of crude oil, condensate and natural gas.
This turnaround is inseparable from logistics: bulk transport systems, pipelines, port evacuation capacity and maritime shipping all determine whether increased production can be monetised through exports.
Manufacturing growth accelerated sharply to 5.0%, mainly from higher output of vegetable and animal oils and fats, and food processing, again contingent on supply chains that move palm oil and other agro products through collection, processing and export routes.
Construction, meanwhile, was the fastest growing sector, surging 28.3% after already strong 21.5% growth in 2024, driven particularly by civil engineering works.
This boom sits on heavy logistics: movement of construction materials, machinery, and labour across the state’s fragmented geography. In other words, the GDP figures tell a story of sectors that have recovered and expanded because the underlying logistics system—roads, ports, storage, and transport services—has been able to support higher volumes, even if with constraints.
Despite this progress, Sabah’s GDP per capita rose only modestly from RM30,575 to RM31,125 and remains far below the national average of RM59,167, while its share of national GDP has stayed at 5.1%, making it the seventh largest state economy.
This gap suggests that current logistics performance is good enough for a rebound but not yet transformative:
it enables higher output but does not fully unlock Sabah’s potential or significantly raise productivity and incomes.
How logistics contributed to the improvement
In narrative form, we can frame logistics as the hidden backbone of Sabah’s 2025 upswing:
i. The tourism linked services surge depended on improved accessibility to Kota Kinabalu and other destinations, better food supply chains, and more reliable movement of goods from ports and wholesale hubs to hotels, restaurants and retail outlets.
ii. The mining and quarrying rebound required coordinated transport from extraction sites to processing and export points, leveraging ports and inland routes capable of handling increased bulk volumes without crippling bottlenecks.
iii. Manufacturing gains in oils, fats and food products were realised because raw materials could be collected from plantations and fisheries, processed, and moved onward to markets; any improvement in trucking, storage, and port throughput directly amplifies this sector’s value added.
iv. Civil engineering and construction growth relied on logistics chains that could deliver aggregates, cement, steel and equipment to project sites across the state, often in challenging terrain, enabling projects to progress and feed into GDP statistics.
This allows us to argue that logistics in Sabah has shifted from a pure bottleneck to a conditional enabler: it is sufficient to support cyclical growth in key sectors, but remains suboptimal for unlocking the full economic potential, particularly in higher-value manufacturing, agro-processing, and trade related services.
Why a transport masterplan is now pivotal
The 2025 data provide a compelling context for a transport masterplan: Sabah has demonstrated that when demand conditions are favourable, the economy can grow at rates comparable to the national average, but structural constraints—especially in logistics—keep per capita incomes and the national share of GDP low.
A well designed transport masterplan can shift logistics from an implicit supporting role to an explicit strategic lever in several ways:
I. Coherent corridor development instead of piecemeal projects
A masterplan can map and prioritise key economic corridors linking resource hinterlands, industrial zones and tourism clusters to main ports and airports, ensuring that road upgrades, port expansions and intermodal facilities are sequenced to maximise impact on freight flows and passenger connectivity.
By reducing travel times, improving reliability, and cutting logistics costs on these corridors, the plan would simultaneously strengthen competitiveness in services, mining, manufacturing, and agriculture.
II. Modernising and integrating ports, terminals and urban logistics
Sabah’s growing output of palm oil, food products, and energy resources requires ports and terminals capable of handling larger, more complex flows efficiently.
A transport masterplan can align port investments (capacity, equipment, digital systems) with hinterland connectivity and urban logistics reforms (freight consolidation centres, better truck access, time window management), so that increased production translates into higher export revenues and value added captured within Sabah.
III. Targeting productivity and inclusiveness through logistics
The persistent gap between GDP per capita and the national average underscores the need for logistics improvements that lower costs and raise margins for rural producers and SMEs, not only for large firms.
By planning feeder roads, rural logistics hubs, and digital platforms for transport services, a masterplan can help integrate remote communities into the state economy, lifting incomes and broadening the base of growth beyond the current concentration in large scale mining and urban services.
IV. Providing a framework for investment and governance
A masterplan offers a clear pipeline of projects and policy reforms, enabling better coordination between state and federal agencies, private investors and development partners.
This reduces fragmentation, improves governance of transport assets and services, and allows Sabah to leverage its recent growth performance to attract more infrastructure investment in logistics intensive sectors.
In essence, Sabah’s 5.1% GDP growth in 2025 shows what the state can achieve when sectoral demand is strong and logistics can cope; a robust transport masterplan is the instrument that can transform this episodic success into sustained, higher-quality growth with better incomes, stronger competitiveness, and greater resilience.
