Labour productivity as measured by value added per employment continued to increase with a 5.2% (Q1 2023: 6.7%) or equivalent to RM 9,852.

Malaysia’s Labour Productivity By Sector in Q2 2023

Malaysia's Labour Productivity By Sector in Q2 2023

According to the Department of Statistics Malaysia (DOSM), Malaysia’s overall economy grew by 2.9% in Q2 2023, a more moderate increase than the 5.6% growth rate in the previous quarter. 

Meanwhile, total hours worked grew by 4% in Q2, reaching up to 9.3 billion hours, up from 9.1 billion hours in Q1 2023. The country’s labour productivity as expressed by value added per hour worked showed a negative growth rate of 1.1% when compared to 2.1% in Q1 2021, year-on-year totalling up to RM 40,600 (Q1 2023: RM 41,200 per hour)

Lastly, the total employment rate also expanded by 16.1 million persons which reflects a 2.8% increase from Q1 2023. Compared to the same of last year, labour productivity by value added per employment, showed a marginal increment of 0.02% (Q1 2023: 2.4%) or equivalent to RM 23,407 (Q1 2023: RM 23,718 per person)

The DOSM report also provide more information by sectors:

1. Construction

Labour Productivity

For year-on-year, the construction sector grew in terms of value added per hour worked, rising up to 3.5% totalling to RM 16,000 in value. 

Meanwhile, there was an expansion of 6.2% in value added for this sector as the total hours rose to 2.7%. Simultaneously, labour productivity as measured by value added per employment continued to increase with a 5.2% (Q1 2023: 6.7%) or equivalent to RM 9,852 (Q1 2023: RM 9,995 per person) as total employment increased by 1%. 

2. Agriculture

Labour Productivity

Despite a 1.1% decrease in agricultural value added, total hours worked increased by 1.9% in the second quarter of this year. Labour productivity per hour worked declined 2.9% (Q1 2023: -0.8%) to RM 22,800 (Q1 2023: RM22,700 per hour) compared to the previous year.

This sector’s total employment increased by 0.2%. Despite this, worker productivity in the same industry declined 1.3% (Q1 2023: -0.1%), or RM 22,800 (Q1 2023: RM 22,700), as measured by value added per employment.

3. Mining & quarrying

Labour Productivity

Labour productivity as measured by value added per hour worked fell 6.7% in Q1 2023, compared to 1.6% in Q1 2023, totaling RM 495,400 (Q1 2023: RM 539,500).

According to the research, this gain is due to a 2.3% decrease in value generated for the industry and a 4.7% increase in hours worked. 

Total employment increased by 0.8%, while labour productivity by value added per employee increased by 0.8% to RM 303,173 (Q1 2023: RM 323,940 per person), following a 3% drop in Q2 2023 (Q1 2023: 1.9%).

4. Manufacturing

Labour Productivity

The expansion in value added totalled to 0.1% whereas the total hours worked showed a rise of 4.2%.

There was a decline of 3.9% (Q1 2023: 0.2%) to reach RM 54,000 ( Q1 2023: RM 55,000 per hour) for the labour productivity in terms of value added per hour worked. 

To break it down even further, the majority of the manufacturing subsector showed significant increases in labour productivity per hour worked:

  • Beverages and tobacco products (11.9%);

  • Electrical, electronic and optical products (6.5%);

  • Transport equipment, other manufacturing, and repair (5.5%);

  • Vegetable and animal oils & fats and food processing (5.3%);

  • Wood products, furniture, paper products and printing (5.1%);

  • Petroleum, chemical, rubber and plastic products (3.1%), and

  • Non-metallic mineral products, basic metal and fabricated metal products (1.5%)

In the meantime, labour productivity per hour worked for subsector textiles, wearing apparels and leather goods decreased by 0.1%.

Overall, total employment in the sector increased by 2.8%.. However, the labour productivity as measure by value added per employment showed a negative growth of 2.6% (Q1 2023: RM 32,477 per person)

The three subsectors that showed the highest growth in this quarter were textiles, wearing apparel and leather products (8.5%), non-metallic mineral products, basic metal & fabricated metal products (3.9%) and beverages & tobacco (3.5%).

5. Services

The services sector showed modest growth of 0.1% (RM 39,000) in labour productivity in Q2, expressed as value added per hour worked (Q1 2023: 2.8% – RM 39,400 per hour). This growth was aligned with the 4.7% expansion in value added and a 4.6% rise in the total hours worked.

There are four sub sector that showed positive growth:

  • Transportation and storage (5.6%);

  • Other services (4.5%);

  • Real Estate and business services (2.8%), and

  • Wholesale and retail trade (0.8%).

Meanwhile, labour productivity per employment for the sector as a whole rose by 1% to RM22,372 (Q1 2023: 3.1%; RM22,650 per person) concurrently with a 3.6% increase in total employment. There was also an increase in most subsectors compared to the same quarter last year.

The subsectors with the highest increase were:

  • Transportation and storage (6.6%);

  • Real Estate and business services (4.9%), and

  • Other services (3.9%).

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