Labour productivity in Malaysia increased in 4 out of 5 key sectors in Q1 2023

In particular, mining & quarrying, services, manufacturing, and construction recorded increases, while labour productivity in agriculture remained "sluggish".

Labour productivity in Malaysia, when measured as value added per employment, grew 2.4% year-on-year (y-o-y) in Q1 2023, as total employment in the country increased by 16.1mn persons (+3.1%).

By level, labour productivity by value added per employment stood at RM23,712 (Q4 2022: RM 24,966).

The Department of Statistics' (DOSM) latest Labour Productivity First Quarter 2023 report further revealed:

• When measured as value added per hour worked, labour productivity in the country saw a 2.1% y-o-y increase in Q1 this year, with total hours worked up 3.5%, recording 9.2bn hours. In Q4 2022, these figures stood at 2.1% and 5% respectively, also recording 9.2bn hours.

• The economy expanded 5.6% in Q3, following a growth of 7.1% in Q4 2022. In terms of level, labour productivity by value added per hour worked was RM41,200 (Q4 2022: RM43,200 per hour). 

Labour productivity by sector

Services

In Q1 2023, labour productivity expressed as a ratio of value added per hour worked increased by 2.8% y-o-y, (Q4 2022: 2.5%), with total hours worked up by 4.3%.

According to DOSM, six sub-sectors recorded positive growth:

• Transportation and storage (8.8%);
• Finance and insurance (6.7%);
• Food & beverages and accommodation (5.2%);
• Wholesale and retail trade (4.9%);
• Real estate and business services (4.9%), and
• Other services (3.0%).

Meanwhile, labour productivity per employment in the services sector grew by 3.1% (Q4 2022: 4.1%), with a 4.1% increase in employment. In this, five sub-sectors recorded positive growth:

• Transportation and storage (8.9%);
• Real estate and business services (7.1%);
• Wholesale and retail trade (6.3%);
• Food & beverages and accommodation (3.9%), and
• Other services (3.4%).

Construction

In this sector, labour productivity as measured by value added per employment continued to increase by 6.7% (Q4 2022: 10%), while recording a 0.7% growth in employment.

At the same time, value added per hour worked added up to RM16,700 (Q4 2022: RM16,800 per hour), while value added per employment stood at RM9,995 (Q4 2022: RM10,015 per person).

Manufacturing

Looking at manufacturing, in Q1 2023, labour productivity in terms of value added per hour worked in the sector improved marginally at 0.2% (Q4 2022: 0.3%). Overall, there were four subsectors recording increases in productivity per hour worked:

• Beverages and tobacco products (5.6%);
• Textiles, wearing apparel and leather products (4.4%);
• Vegetable and animal oils & fats and food processing (2.2%), and
• Non-metallic mineral products, basic metal and fabricated metal products (1.9%).

Next, measured by value added per employment, labour productivity grew by 0.7% (Q4 2022: 1.6%), while employment posted an increase of 2.6%.

Six subsectors recorded positive growths in the quarter:

• Textiles, wearing apparel and leather products (7.4%);
• Beverages and tobacco products (3.3%);
• Non-metallic mineral products, basic metal and fabricated metal products (2.5%);
• Vegetable and animal oils & fats and food processing (2.2%);
• Transport equipment, other manufacturing and repair (0.7%), and
• Petroleum, chemical, rubber and plastic products (0.6%).

In terms of level, labour productivity as measured by value added per hour worked amounted to RM55,000 (Q4 2022: RM58,00 per hour), while value added per employment stood at RM32,477 (Q4 2022: RM34,854 per person). 

Mining and quarrying

Over in the mining and quarrying sector, value added expanded by 2.4% in the quarter, with hours worked growing by 0.9%. As a result, labour productivity, when measured as value added per hour worked, saw a 1.6% increase y-o-y. 

When measured by value added per employment, the sector also saw an increase in labour productivity, up 1.9% as employment rose by 0.5%.

Finally, in terms of level, labour productivity expressed as value added per hour worked and value added per employment were RM539,500 (Q4 2022: RM553,300 per hour) and RM323,940 (Q4 2022: RM332,521 per person), respectively.

Agriculture

The only sector where labour productivity per hour worked remained "sluggish" was the agriculture culture, recording -0.9% year-on-year (Q4 2022: -0.6%). Value added posted an increase of 0.9%, while hours worked increased by 1.8%.

In a similar vein, labour productivity when measured by value added per employment also saw a decrease in Q1 2023 (-0.2%), while employment rose 1.1%.

On a whole, value added per hour worked for this sector was RM22,700 (Q4 2022: RM25,200 per hour), while value added per employment was RM12,172 (Q4 2022: RM13,721 per person).

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Lead image and infographics: DOSM