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Malaysia's labour productivity growth exceeds Singapore and USA

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Overall, Malaysia's labour productivity grew by 2.2% from 2017 to 2018, based on real added value per person employed. This fell below its targeted growth of 3.2% detailed under the 11th Malaysia Plan.

Based on the Malaysia Productivity Corporation's Productivity Report 2018/2019, Malaysia's labour productivity growth exceeded that of other developed countries (such as Singapore, Australia, Korea, Japan, and USA) in terms of output per person employed and output per hour worked - both coming in at 2.8%.

That said, Malaysia scored the lowest in labour productivty level for both. Whereas neighbouring Singapore recorded the highest labour productivity level per person employed, at USD 145,864.

The rankings for labour productivity per persons employed of each developed country in order of most to least, are as follows:

  • Singapore - USD 145,864
  • USA - USD 126,979
  • Australia - 101,875
  • Japan - 80,571
  • Korea - 76,850
  • Malaysia - 68,321
In terms of labour productivity per hour, the US registered the highest with USD72.

The rankings for labour productivity per hour of each developed country in order of most to least, are:

  • USA - USD 72
  • Singapore - USD 65
  • Australia - USD 59
  • Japan - USD 47
  • Korea - USD 37
  • Malaysia - USD 31


In comparison with neighbouring Asian countries - Thailand, China, Indonesia and the Philippines - Malaysia ranked the highest in labour productivity level both per person employed and per hour.




Labour productivity level and growth of Malaysia's main economic sectors in 2018

Broken down into sectorial productivity performance, the five main sectors studied were services, manufacturing, construction, agriculture, and mining and quarrying.

All these sectors, except the agriculture sector which registered a decline, experienced growth in 2018.

Overall, the services sector remained the largest economic contributor to the GDP (56.7%), valuing at RM 771.9 billion, with a total of 8.9 million employees.

At the same time, the manufacturing sector was the second largest contributor with a workforce of 2.5 million employees and a contribution of 22.4% (RM 304.8 billion) to the GDP.

In third was the mining and quarrying sector which employed the least people of the five sectors at 69,000, contributing RM 103.1 billion (7.6%) to GDP.

Over in the agriculture sector, it employed a total of 1.8 million people in 2018, with a 7.3% contribution, or RM 99.5 billion, to Malaysia's GDP.

Following that is the construction sector, with a contribution of 4.9% to the GDP (RM 66.2 billion) and an employment of 1.5 million people.



Malaysia's total labour force grew by 2.5% in 2018

The report noted that employment contributed to the country's national performance, alongside a conducive financial condition, steady inflation, the significant growth in domestic demand and steady global growth and trade.

Overall, Malaysia's labour market conditions remained stable in 2018, with a growth of 2.5% in its total workforce (15.3 million persons).

At the same time, together with its growth of 2.4%, the country saw 14.8 million employees in 2018, up from 14.4 million in 2017. The largest employee pool came from the services sector, with 8.9 million employees making up 60% of the total employment.

More importantly, despite uncertainties in the global market and the downsizing of job vacancies to 198,000 (2017: 206,000), a total of 101,000 jobs were still created.

According to the Bank Negara Malaysia Annual Report 2018, this rise in employment was mainly contributed by high and mid-skilled workers, indicating a shift in employment pattern up from low-skilled workers.

The report also noted that unemployment rate remained at 3.4%.

Lead image and infographics / Malaysia Productivity Corporation

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