SEJONG (Yonhap) -- The number of companies in South Korea's service sector rose 1.8 percent on-year in 2013 to over 2.62 million, the government's statistical office said Wednesday.

Statistics Korea said these companies employed a combined 10.23 million people, up 4.7 percent from the year before. The increase comes as Seoul has pinpointed the service sector as an industry that can create more jobs and fuel economic growth. In the past, the government as a whole favored manufacturing and did not pay as much attention to the service sector.

It said while there were fewer firms in leisure, sports and arts, more businesses have been founded in recycling and waste disposal, publishing and broadcasting, and medical and welfare services.

Job growth was most pronounced in business facility investment, medical services and publishing.

The latest data showed that combined sales of service companies edged up 0.8 percent, or 12 trillion won ($10.8 billion), to 1,440 trillion won, but annual sales numbers for an individual company dipped 5 million won, or 0.9 percent, to 549 million won.

Sales figures for wholesale and retail dipped 0.5 percent, while medical and welfare-related businesses posted a 7.1 percent spike.

Statistics showed some 151,000 franchise businesses in 2013, up 2.7 percent, or 4,000, from 2012, employing 511,000 people, a gain of 25,000 from a year earlier.

The report was based on data collected from approximately 200,000 businesses nationwide, excluding small-time street vendors and those that operated out of homes.

The service sector as defined by Statistics Korea covers recycling, retail and wholesale, hospitality, publishing, real estate and rental, value-added professional services, industry support operations, education, sports and leisure, and other private small-scale work businesses.