Labour productivity growth rises by 3.8% in 2017


Malaysia registered a labour productivity growth of 3.8% at RM81,268 per person employed in 2017, driven by higher employment and the country’s gross domestic product (GDP) of 5.9%.

International Trade and Industry Minister Darell Leiking said Malaysia must continue to pursue further improvements in productivity across all economic sectors in order to retain its competitiveness in the global arena.

“This requires a holistic transformation, including productivity improvements to be charted differently, not only in terms of technology, regulations, industry structure, talents and skill, and productivity drive, but more importantly in terms of mindset at all levels,” he said in his speech at the launch of the report in Kuala Lumpur yesterday.

He added that the government will ensure the economy is driven by innovation by introducing policies that will encourage businesses to succeed, especially small- and medium-sized enterprises.

Productivity growth for the year exceeded the national target of 3.7% set under the 11th Malaysia Plan. In terms of value, it stood at 88% of the targeted level of RM92,300 by 2020.

Based on the Productivity Report 2017/2018 released by the Malaysia Productivity Corp (MPC), the mining sector recorded the strongest performance with growth in labour productivity at 6.8%, followed by services at 5%, manufacturing (4.3%), construction (2.4%) and agriculture (1.4%).

Among the selected Asian countries, Malaysia’s labour productivity per person employed in US dollar — valued at US$64,259 (RM260,892) — is ahead of Thailand’s (US$31,515), China’s (US$30,099), Indonesia’s (US$26,336), the Philippines’ (US$20,096) and India’s (US$17,164).

However, among developed countries in the region, Malaysia trailed by a sizeable margin against the likes of Singapore (US$134,443), South Korea (US$74,679) and Japan (US$79,497).

On growth, the country lagged behind China, India and the Philippines. All three improved by 7.1%, 4.3% and 3.9% respectively.

“Policies that geared towards a competitive open economy encourage investments, and productivity will be strengthened to ensure Malaysia continues to record a sustainable economic growth,” Darell said.

Meanwhile, MPC chairman Tan Sri Azman Hashim said the statutory body will strengthen initiatives on good regulatory practice by further streamlining regulations, accelerate efforts towards addressing regulatory constraints and ensure an innovative policy development engagement, which will embrace disruptive technologies.

“A total of 43 projects under modernising business licensing, reducing unnecessary regulatory burden and cutting red tape programmes were completed in 2017. It is estimated that these projects resulted in potential compliance cost savings of RM1.2 billion annually,” Azman said.

Malaysia’s labour productivity is expected to expand between 3% and 4% in 2018, benefitting from the anticipated positive GDP growth of 5.5% to 6% this year.