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Growth was seen across most sectors, driven by gains in construction, manufacturing, services, and agriculture.
Malaysia’s labour productivity per hour worked increased by 3.4% in the second quarter of 2025, registering RM43.2 per hour, according to the Department of Statistics Malaysia (DOSM).
Dato’ Sri Dr. Mohd Uzir Mahidin, Chief Statistician Malaysia said the economy expanded by 4.4% in the quarter, maintaining the same pace as Q1 2025. Total hours worked increased slightly by 1% to register 9.7bn hours, while labour productivity per employment climbed 2.8% to RM24,887 per person, supported by a 1.6% increase in employment to 16.8mn people.
Sectoral performance: construction leads the way
Breaking down by sector, construction continued to record the highest growth in labour productivity per hour worked, increase to 9.3% compared to 11.3% in Q1 2025. This was followed by:
- Manufacturing: 3.7% (Q1 2025: 3.8%)
- Services: 3.6% (Q1 2025: 2.0%)
- Agriculture: 3.5% (Q1 2025: 0.4%)
- Mining & quarrying: -4.6% (Q1 2025: -0.9%)
Within services, all subsectors except utilities saw growth. Real estate and business services led with 9.1%, followed by transportation and storage (7.1%), other services (6.7%), wholesale and retail trade (3.5%), information and communication (3.3%), food & beverages and accommodation (2.3%), and finance and insurance (0.6%). Utilities recorded a decline (-0.4%).
In manufacturing, gains were seen in subsectors such as vegetable, animal oils & fats and food processing (13.9%), petroleum, chemical, rubber and plastic products (5.4%), and electrical, electronic and optical products (5.1%). However, declines were observed in textiles, wearing apparel and leather products (-2.2%), transport equipment and repair (-1.9%), and beverages and tobacco products (-0.3%).
Labour productivity per employment
When measured by value added per employment, construction again stood out with 11.0% growth (Q1 2025: 13.2%). Other sectors recorded more moderate increases:
- Services: 2.9% (Q1 2025: 2.4%)
- Manufacturing: 2.8% (Q1 2025: 3.2%)
- Agriculture: 2.3% (Q1 2025: 0.6%)
- Mining & quarrying: -5.8% (Q1 2025: -3.2%)
In the services sector, real estate and business services posted the highest rise at 6.8%, followed by transportation and storage (6.6%), food & beverages and accommodation (5.3%), and other services (4.3%). Meanwhile, wholesale and retail trade grew by 2.3%, finance and insurance by 1.2%, and information and communication by 0.8%. Utilities declined by 0.9%.
Manufacturing subsectors also showed mixed performance. Stronger gains came from vegetable and animal oils & fats and food processing (9.5%) and electrical, electronic and optical products (6.1%). At the same time, transport equipment and repair (-2.6%) and textiles, wearing apparel and leather products (-0.4%) saw declines.
Looking ahead, Dr Uzir said: "Continued investment in skills development including digital transformation, communications and analytics will be key in sustaining the enhancement of labour efficiency."
ALSO READ: MSMEs in Malaysia employed nearly half the workforce in 2024, with productivity on the rise: DOS
Lead image / DOSM infographic
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