Malaysia's labour productivity by sector in Q2 2023

In the construction sector, labour productivity by value added per employment continued its upward trend, with a 5.2% increase quarter-on-quarter.

According to the Department of Statistics Malaysia (DOSM), Malaysia's overall economy expanded by 2.9% in Q2 2023 — a more moderate increment compared to the previous quarter's growth rate of 5.6%.

Meanwhile, total hours worked increased 4% in Q2 to register 9.3bn hours worked – up from 9.2bn hours in Q1 2023. The growth in labour productivity, as expressed by value added per hour worked, also slowed to 1.1% (Q1 2023: 2.1%), year-on-year, recording RM40,600 (Q1 2023: RM41,200 per hour). 

Lastly, total employment also expanded by 16.1mn persons, reflecting a 2.8% increase from Q1 2023. Compared to the same quarter last year, labour productivity by value added per employment, showed a marginal increase of 0.02%(Q1 2023: 2.4%) or equivalent to RM23,407 (Q1 2023: RM23,718 per person).

The DOSM report also provided more insights by sector.

Construction

Year-on-year, the construction sector grew in terms of value added per hour worked, rising to 3.5% to record RM16,500 in value. 

At the same time, there was an expansion of 6.2% in value added for the sector, while total hours worked rose 2.7%. Concurrently, labour productivity as measured by value added per employment continued its upward trend, with a 5.2% increase (Q1 2023: 6.7%), or equivalent to RM9,852 (Q1 2023: RM9,995 per person) as total employment increased by 1%.

Agriculture

While value added decreased by 1.1 % for the agriculture sector, total hours worked in Q2 this year increased by 1.9%. Comparing it to the previous year, labour productivity per hour worked continued to decline by 2.9% (Q1 2023: -0.8%) to record RM22,800 (Q1 2023: RM22,700 per hour).

The sector also saw a 0.2% increase in total employment. Despite this, labour productivity measured by value added per employment in the same sector showed a decline of 1.3% (Q1 2023: -0.1%) or equivalent to RM22,800 (Q1 2023: RM22,700 per hour).

Mining and quarrying

Over in the mining and quarrying sector, labour productivity measured by value added per hour worked saw a negative growth of 6.7%, compared 1.6% in Q1 2023. In specific figures, this added up to a value of RM495,400 (Q1 2023: RM539,500).

The report attributed this growth to a 2.3% decline in value added for the sector, and a 4.7% increase in hours worked.

Total employment, on the other hand, grew by 0.8%, while the labour productivity by value added per employment reached RM303,173 (Q1 2023: RM323,940 per person) following a fall of 3% in Q2 2023 (Q1 2023: 1.9%).

Manufacturing

In manufacturing, the expansion in value added amounted to 0.1%, while total hours worked demonstrated a rise of 4.2%.

Looking at labour productivity in terms of value added per hour worked, there was a decline of 3.9% (Q1 2023: 0.2%) to reach RM54,000 (Q1 2023: RM55,000 per hour).

Breaking it down even further, the majority of the manufacturing subsector showed increments in labour productivity per hour worked, namely:

• 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%)

At the same time, labour productivity per hour worked for subsector textiles, wearing apparel and leather products decreased by 0.1%.

Overall, total employment in the sector increased by 2.8%; however, the labour productivity as measured by value added per employment demonstrated a negative growth of 2.6% (Q1 2023: 0.7%) — equivalent to RM32,074 (Q1 2023: RM32,477 per person).

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

Services

Finally, the services sector noted a modest improvement of 0.1% (or RM39,000) in labour productivity in Q2, expressed as value added per hour worked (Q1 2023: 2.8%; RM39,400 per hour). This growth aligned with the 4.7% expansion in value added and a 4.6% rise in total hours worked.

There were four subsectors that demonstrated 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%).

Lead image / Department of Statistics Malaysia