Malaysia’s Labour Productivity Posts Modest Growth in Q1 2025 Amid Sectoral Divergence
Malaysia’s labour productivity in the first quarter of 2025 saw a modest increase of 1.0% per hour worked, according to the Department of Statistics Malaysia (DOSM), signalling continued growth momentum but at a slightly slower pace than the previous quarter (Q4 2024: 1.4%). Value added per hour worked stood at RM42.50, while total hours worked expanded by 3.3% to 9.8 billion hours.
The country’s economy grew 4.4% year-on-year, achieving a value added of RM415.2 billion, slightly easing from the 4.9% recorded in the final quarter of 2024.
Meanwhile, labour productivity per employment rose by 1.3%, with value added per worker reaching RM24,580, supported by a 3.0% increase in total employment to 16.9 million persons.
Sectoral Breakdown
Agriculture: Marginal Recovery
The agriculture sector posted a 0.1% increase in productivity per hour worked, reversing the previous quarter’s decline. However, value added per hour dropped to RM23.30 from RM25.10, with value added rising modestly by 0.6%. Employment and hours worked both edged up 0.3% and 0.5% respectively.
Mining & Quarrying: Continued Contraction
Productivity in the mining and quarrying sector fell 0.9%, with value added per hour worked at RM551.10. Sector output shrank by 2.7%, while hours worked dropped 1.8%. The steepest decline was in productivity per employment, which dropped 3.2% to RM332,946 per person, despite a slight employment increase.
Manufacturing: Broad-Based Growth
The manufacturing sector experienced a healthy 2.8% growth in labour productivity per hour worked, backed by a 4.1% rise in value added to RM95.7 billion. Subsector leaders included:
- Vegetable and animal oils & fats, and food processing (+9.3%)
- Beverages and tobacco products (+7.1%)
- Electrical, electronic, and optical products (+6.6%)
Overall employment rose by 1.9%, with value added per employment increasing 2.2% to RM33,299.
Construction: Strong Rebound
Construction was the standout performer, with productivity per hour worked jumping 11.3%, as value added surged 14.2% to RM17.76 billion. Labour productivity per employment soared 13.2%, reaching RM12,519 per person. The sector also recorded modest growth in employment (+0.9%) and hours worked (+2.5%).
Services: Stable but Mixed
The services sector saw a 0.5% increase in labour productivity per hour worked, with value added at RM247.9 billion (+5.0%). Subsector performance varied:
- Growth: Real estate and business services (+6.0%), transportation and storage (+4.3%), other services (+2.8%)
- Decline: Utilities (-6.3%), food & beverages and accommodation (-2.5%), finance and insurance (-0.4%)
Productivity per employment in services rose 0.8% to RM23,291, while employment grew 4.1% to 10.64 million persons.
While the overall growth in productivity per hour and per employment points to a resilient economy, the diverging sectoral trends suggest pockets of weakness—especially in mining and services subsectors like utilities and finance. On the upside, the manufacturing and construction sectors continue to underpin Malaysia’s economic momentum with broad-based productivity improvements.
The Department of Statistics notes that labour market conditions remain strong, and continued investment in skills development and digital transformation will be key to sustaining productivity gains in the quarters ahead.
