Labour productivity declined -2.9% in 4Q20

by TMR/ pic by ARIF KARTONO

Malaysia’s labour productivity continued to decline at negative 2.9 per cent in the fourth quarter last year (4Q20), falling further from negative 2.2 per cent recorded in the previous quarter, according to the Department of Statistics.

“Labour productivity remained in the declining trend for the fourth consecutive quarter, posting negative 2.9 per cent in Q4 2020 to record value added per employment of RM23,570 per person (Q3 2020: RM23,257 per person).

During the quarter, number of employment reduced 0.6 per cent (Q3 2020: -0.4%) to 15.2 million persons while Gross Domestic Product (GDP) for Q4 2020 contracted 3.4 per cent (Q3 2020: -2.6%),” chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement today.

In Q4 2020, the total hours worked declined 2.7 per cent (Q3 2020: -2.7%) in line with the shorter businesses operation hours following the Conditional Movement Control Order (CMCO).

“This had resulted to the labour productivity as measured by value added per hour worked dropping slightly by 0.8 per cent at RM42 per hour after increasing marginally by 0.1 per cent (RM41 per hour) in Q3 2020,” Mohd Uzir explained.

In the latest labour productivity report for the 4Q20, the department stated that by economic sector, manufacturing was the only sector posting a positive growth of 3.2 per cent (Q3 2020: 3.7%) for labour productivity by value added per employment.

Mining and Quarrying sector continued to record a significant drop of 9.1 per cent in Q4 2020 as compared to negative 4.6 per cent in the previous quarter.

In the meantime, labour productivity by employment for Construction and Services sectors fell
8.4 per cent (Q3 2020: -10.2%) and 4.9 per cent (Q3 2020: -3.9%) respectively.

Construction recorded the highest fall in labour productivity with negative 6.7 per cent (Q3 2020: -9.0%), followed by Mining and Quarrying (-6.4%) and Services (-2.7%).

Mohd Uzir Mahidin also said that the Covid-19 pandemic had forced businesses to re-examine their existing business operation models and to explore new opportunities through digitalisation. He added with adoption of technology, efficiency in production will be improved and subsequently escalate the
productivity in the medium and long-term.

An increase in production and productivity will drive profitability, and hence sustain businesses as well as retaining employment and creating job opportunities.