Selangor Journal

Malaysia’s labour productivity declines 0.8 pct — statistics dept

KUALA LUMPUR, May 21 — Malaysia’s labour productivity per employment declined 0.8 per cent in the first quarter of 2020 (Q1 2020) from 1.4 per cent in Q4 2019 following the implementation of the movement control order (MCO) to contain Covid-19 pandemic.

The value-added per employment was RM22,578 per person in Q1 2020 compared to RM24,263 per person in Q4 2019.

Labour productivity, or value-added per employment, is calculated by dividing value-added and employment encompassing employers, employees, own-account workers and unpaid family workers.

The Department of Statistics Malaysia (DoSM) chief statistician Datuk Seri Dr Mohd Uzir Mahidin said Malaysia’s labour productivity for Q12020, as measured by value-added per worked rose 2.1 per cent (Q4 2019:1.4 per cent) with a value of RM40 per hour (Q4 2019:RM42 per hour).

The increase in labour productivity by hours worked in this quarter was due to a larger decline in hours worked as against moderation in the output produced, he said in a statement today.

“The implementation of the first phase of MCO has caused a decline in total hours worked during this quarter.

“Average hours worked in this quarter was only 44.3 hours per week (Q4 2019: 45.0 hours). Value-added which indicates the domestic output of goods and services produced grew marginally at 0.7 per cent in Q1 2020 as compared to 3.6 per cent in the preceding quarter,” he said.

He noted despite slower economic performance at 0.7 per cent in the first quarter, employment increased 1.6 per cent which recorded 15.2 million persons.

Mohd Uzir said in this quarter, the agriculture sector’s labour productivity by employment for agriculture sector decreased 8.9 per cent (Q4 2019: -6.1 per cent) while for mining and quarrying sector dropped 0.4 per cent (Q4 2019: -4.0 per cent).

The manufacturing sector registered a decline of 0.2 per cent (Q4 2019: 0.8 per cent) and the construction sector shed 5.3 per cent (Q4 2019: 3.2 per cent).

The services sector was the only sector which recorded positive growth in labour productivity per employment at 0.5 per cent (Q4 2019: 2.9 per cent), he said.

Mohd Uzir said in addition to slower global demand, the unprecedented event has affected Malaysia’s economy.

The decline in labour productivity per employment during this challenging period was due to most of the industries retaining their employment despite moderated growth in production.

However, he said the performance of labour productivity per hour worked increased due to the significant reduction in hours worked particularly during the MCO and not influenced by the automation in the industry.

Despite the economic shock, Mohd Uzir said industries with high technology were able to maintain their productivity and business.

“Capital intensive industries with the adoption of automation are more resilient and thus higher labour productivity as compared to labour-intensive industries.

“As an example, food and beverage service activities in Malaysia which are synonym to the high capacity of manpower will face the contraction in labour productivity during a crisis such as the Covid-19 pandemic.

“Undeterred by lack of demand for these services, employers still retained the workers and continued to pay wages, “ he said.

He opined that the use of automation for capital intensive industries, business operations can be adjusted quickly when facing any crisis and productivity can be maintained hence industries should leverage on this crisis to reassess existing business structure by innovating towards a new normal of doing business.

Subsequently, in the long term, the country will be able to resolve the issue of labour mismatch by creating more skilled jobs, he said.

He viewed that the crisis should also be a turning point to reduce the dependence on semi-skilled and low-skilled jobs as it will also increase return on the factor of production in tandem with the rising tertiary education of the country’s population.

As most industries in the country are still labour intensive, currently for each production worth RM1, the compensation to workers is only RM0.36, he said.

Mohd Uzir said the cooperation of all parties including government and industries are vital to bringing the transformation of capital intensive industries, as well as to aid the transition to high technology.

— Bernama

Top Picks

DOSM opens 300 extra counters as Padu registration deadline approaches

New tax incentive for Malaysian digital status companies — MDEC

Drug trafficking: Former university student gets 30 years’ jail, whipping