25 May 2025

PUTRAJAYA, 25 May 2025 — Malaysia’s labour productivity showed continued improvement in the first quarter of 2025, supported by gains in several core economic sectors, particularly construction and manufacturing. According to the Labour Productivity Report, First Quarter 2025, published by the Department of Statistics Malaysia (DOSM), productivity per hour worked rose by 1.0% year-on-year, while productivity per employment increased by 1.3%.

The national economy expanded by 4.4% during the quarter, with value added reaching RM415.2 billion, slightly below the 4.9% growth recorded in the previous quarter. Total hours worked climbed by 3.3% to 9.8 billion hours, while the employed population grew by 3.0% to 16.9 million people.

Construction and Manufacturing Sectors Record Strong Productivity Gains

The construction sector was the standout performer, recording an 11.3% increase in labour productivity per hour worked in Q1 2025. This improvement was supported by a significant 14.2% increase in value added, which rose to RM17.76 billion for the quarter. Meanwhile, total hours worked increased by 2.5%, and average weekly working hours rose by 1.7% to reach 46.3 hours. Labour productivity per employment surged 13.2%, with value added per employee recorded at RM12,519, and employment grew by 0.9% to reach 1.419 million workers.

In the manufacturing sector, labour productivity per hour worked grew by 2.8%, reflecting a solid 4.1% expansion in value added to RM95.68 billion. Total hours worked rose by 1.3%, although the average working week slightly contracted by 0.7% to 45.6 hours. Labour productivity per employee improved by 2.2%, amounting to RM33,299 per person, while total employment increased by 1.9% to reach 2.873 million workers.

Growth was evident in several manufacturing subsectors. Labour productivity per hour worked in the vegetable and animal oils & fats and food processing subsector rose by 9.3%, indicating operational efficiencies and likely stronger demand. The beverages and tobacco products subsector increased by 7.1%, and the electrical, electronic and optical products segment saw a 6.6% gain, highlighting continued strength in electronics exports. Modest growth was also recorded in textiles, wearing apparel and leather products at 2.7%, wood products, furniture, paper and printing at 1.9%, and petroleum, chemical, rubber and plastic products at 0.3%.

However, the sector also faced challenges. Productivity fell in the transport equipment, other manufacturing and repair subsector by 6.1%, and in non-metallic minerals and basic metals by 2.7%, pointing to subdued demand or transitional disruptions.

Services Sector Posts Mixed Outcomes with Modest Overall Growth

The services sector reported a 0.5% growth in labour productivity per hour worked, driven by a 5.0% increase in value added, which reached RM247.89 billion in Q1 2025. Total hours worked climbed 4.5% to 6.153 billion, and average weekly working hours increased by 0.4% to 44.8 hours. In parallel, productivity per employee in the sector rose 0.8%, reaching RM23,291, with employment increasing by 4.1% to total 10.643 million workers.

Within services, subsector performance was highly uneven. Real estate and business services posted the strongest productivity gain per hour at 6.0%, supported by a 5.1% increase per employee, indicating rising activity in property and professional service markets. The transportation and storage subsector expanded by 4.3% both per hour and per employee, highlighting strong logistics and movement of goods. Other services, a category including social, cultural, and personal services, saw growth of 2.8% per hour and 2.9% per employee, while information and communication improved slightly by 0.8% per hour but dipped 0.1% per employee. Wholesale and retail trade showed marginal improvement, gaining 0.6% per hour and 0.1% per employee. Finance and insurance saw a 0.4% decline in productivity per hour, though productivity per employee still rose 0.8%.

In contrast, utilities contracted significantly, with productivity per hour falling by 6.3% and productivity per employee declining by 5.9%, suggesting inefficiencies or elevated costs. The food and accommodation subsector also underperformed, with a 2.5% drop in productivity per hour and only a 0.2% gain per employee, reflecting potential overstaffing or demand slowdowns.

Agriculture Sector Holds Steady; Mining Sector Sluggish

The agriculture sector recorded a modest 0.1% increase in labour productivity per hour worked, reaching RM23.3 per hour. Value added grew by 0.6% to RM23.71 billion, while hours worked increased by 0.5%, and weekly working hours rose 0.2%. Productivity per employee edged up 0.3% to RM12,603, with the number of workers in the sector increasing by 0.3% to 1.881 million.

The mining and quarrying sector, however, remained a drag on productivity. Labour productivity per hour worked declined by 0.9%, with value added falling by 2.7% to RM25.49 billion. Hours worked decreased by 1.8%, and average weekly working hours dropped 1.0%. Although the total number of workers rose slightly by 0.5% to 77,000, productivity per employee decreased by 3.2% to RM332,946.

Priority Subsectors Reflect Strategic Growth and Ongoing Challenges

Among the 14 priority subsectors monitored under the Malaysia Productivity Blueprint, several recorded notable progress in 2024. The logistics subsector reported a 9.0% increase in labour productivity per hour worked, attributed to rising freight activity and digital optimisation. The tourism subsector, recovering from pandemic lows, saw a 7.8% gain, reflecting renewed domestic and international travel demand.

The construction and built environment subsector posted the strongest productivity gain with a 17.6% increase per hour, driven by infrastructure revival and efficient workforce deployment. The professional services subsector recorded a 5.3% improvement, and pharmaceuticals grew by 5.1%, likely driven by medical manufacturing and healthcare demand.

On the other end, the aerospace subsector experienced a continued downturn, with a 19.6% decline in productivity, reflecting supply chain bottlenecks, investment delays, or restructuring. The ICT subsector also fell slightly by 0.6%, despite its importance, suggesting saturation or recalibration in the sector.

Malaysia Tops Global Rankings in Open Data for the First Time

Malaysia’s statistical capabilities received global recognition as the country ranked first in the world in the 2024/25 Open Data Inventory (ODIN) released by Open Data Watch. This marked a historic improvement from 67th place in 2022/23, highlighting the country’s commitment to data transparency, accessibility, and quality.

To institutionalise the role of data, the government has officially declared October 20 as National Statistics Day (MyStats Day). The 2025 edition coincides with the Fourth World Statistics Day, celebrated globally under the theme “Driving Change with Quality Statistics and Data for Everyone.”

Looking Ahead: Strategic Policy Anchored in Data and Productivity

Dato’ Sri Dr. Mohd Uzir Mahidin, Malaysia’s Chief Statistician, underscored the importance of labour productivity as a foundation for policymaking, investment planning, and talent development. He noted that these indicators would be central to driving Malaysia’s transformation into a high-income, innovation-led economy.

Malaysia’s role as the chair of the upcoming 15th ASEAN Community Statistical System Committee (ACSS15) will further elevate its position as a leader in regional data collaboration. With OpenDOSM NextGen and improved public access to productivity data, Malaysia is setting the stage for inclusive, evidence-based growth.

Source: Wilayah.com.my