Identifying Key Sectors in the Economies of Sabah, Sarawak, and Peninsular Malaysia: An Input–Output Analysis

This paper investigates the key economic sectors of Sabah, Sarawak, and Peninsular Malaysia using the input–output (I–O) framework based on the 2015 interregional input–output (IRIO) table. Linkage analysis is employed to assess both backward and forward linkages (weighted and unweighted approach) to identify sectors with the highest capacity to stimulate production across the economy. The findings indicate significant structural differences across regions. Sabah remains resource-driven with agriculture, forestry, and food processing as its dominant sectors; Sarawak is heavily reliant on resource-based industries, particularly oil, gas, and energy-intensive manufacturing. Meanwhile, Peninsular Malaysia demonstrates a more diversified economic structure, led by wholesale and retail trade, manufacturing, finance, and services. These results highlight the importance of region-specific policies to strengthen intersectoral linkages and achieve a more balanced national development.