Malaysia’s labour productivity climbs to RM46.3 per hour in Q4 2025

Output per hour worked rose 4.9% in the fourth quarter, supported by stronger economic growth, higher employment, and gains across all sectors, DOSM reports.

Malaysia’s labour productivity continued to improve in the fourth quarter of 2025, driven by stronger economic performance and a steady labour market.

According to the Department of Statistics Malaysia (DOSM), labour productivity per hour worked increased 4.9% year on year to RM46.3 per hour.

Mohd Uzir Mahidin, Chief Statistician said Malaysia’s economy expanded by 6.3% in Q4 2025, compared with 5.4% in the preceding quarter.

During the same period, total hours worked rose by 1.4% to 9.9bn hours, while employment increased to 17.1mn persons, representing a year-on-year growth of 1.8% (Q3 2025: 17.0 million persons; 1.5%).

Labour productivity per employment also improved, rising 4.4% to RM26,765 per person (Q3 2025: 3.9%; RM26,122 per person).

Construction leads productivity growth by sector

Measured by value added per hour worked, productivity growth was recorded across all sectors.

Construction posted the highest increase at 10.3%, followed by:

• Manufacturing: 6.4%
• Agriculture: 5.5%
• Mining and quarrying: 5.1%
• Services: 4.0%

Services sector driven by food, accommodation, and digital activities

Within services, most subsectors recorded growth in productivity per hour worked.

Food and beverages and accommodation led with a 7.9% increase, followed by:

• Other services: 7.2%
• Information and communication: 6.4%
• Transportation and storage: 5.6%
• Real estate and business services: 2.8%
• Wholesale and retail trade: 2.4%
• Utilities (-1.0%) and finance and insurance (-0.8%) were the only subsectors to record declines.

Manufacturing expands across most subsectors

Productivity per hour worked in manufacturing rose across nearly all subsectors, except transport equipment, other manufacturing, and repair, which declined by 2.7%.

Strong gains were recorded in:

• Vegetable and animal oils and fats and food processing: 15.8%
• Electrical, electronic, and optical products: 11.4%
• Beverages and tobacco products: 10.6%
• Non-metallic mineral, basic metal, and fabricated metal products: 4.1%
• Other subsectors, including textiles (2.3%), wood products (2.0%), and petroleum-related industries (1.5%), had smaller increases.

Productivity per employee also increases

When measured by value added per employment, all sectors recorded growth, though at different rates.

Construction again led with a 10.1% increase, followed by:

• Agriculture: 5.4%
• Manufacturing: 5.1%
• Services: 3.7%
• Mining and quarrying: 1.3%

In services, most subsectors improved, particularly information and communication (7.3%), transportation and storage (5.7%), food & beverages and accommodation (5.1%), real estate and business services (4.9%), wholesale and retail trade (3.2%), utilities (1.5%), and other services (5.9%). Finance and insurance declined by 0.7%.

Meanwhile, labour productivity per employment in the manufacturing sector expanded during the quarter, supported by strong growth across most subsectors.

The largest gains were recorded in electrical, electronic and optical products (10.7%), followed by vegetable and animal oils & fats as well as food processing (9.8%), and beverages and tobacco products (5.8%). Other increases were seen in non-metallic mineral products, basic metal and fabricated metal products (4.4%), wood products, furniture, paper products and printing (2.2%), petroleum, chemical, rubber and plastic products (0.5%), and textiles, wearing apparel and leather products (0.3%).

In contrast, transport equipment, other manufacturing and repair activities recorded a decline of 1.7% during the same period.

Full-year productivity shows steady improvement

For the whole of 2025, labour productivity per hour worked grew 3.7%, reaching RM44.5 per hour, compared with RM42.9 in 2024.

Labour productivity per employment rose 3.4% to RM102,672 per person, an increase from RM99,265 the previous year.

DOSM said all sectors recorded stable positive momentum throughout 2025.

“Malaysia's labour productivity is well positioned towards a positive outlook in 2026, supported by stable labour market and sustainable economic performance throughout the year,” Dr Uzir concluded.

ALSO READ: New Johor Bahru-Singapore RTS Link Bill 2026 sets legal safeguards for officers, data, and cross-border operations