Malaysia’s labour productivity strengthened in the second quarter of 2026, with productivity per hour worked rising 5.5% year-on-year (y-o-y) to RM46.50, supported by stronger economic activity and continued employment growth.
According to DOMS, total hours worked rose 0.5% to 9.6 billion hours, while total employment increased 1.1% to 16.8 million persons.
Labour productivity measured by value added per employment also accelerated, growing 4.9% to RM26,595 per person from 4.3% in 1Q26.
The improvement was broad-based across most major economic sectors, with manufacturing recording the strongest productivity growth among the major sectors.
Manufacturing leads productivity gains
The manufacturing sector’s value added expanded 7.3% to RM104.01 billion in 2Q26, accelerating from 5.9% in the previous quarter.
As a result, labour productivity per hour worked increased 7.1% to RM62.20, compared with 5.8% in 1Q26.
Manufacturing labour productivity per employment increased 7.3% to RM36,653 per person, while employment grew 0.1% to 2.84 million persons.
Services sector sustains momentum
The services sector remained the largest contributor to the economy, with value added rising 5.9% to RM265.97 billion in 2Q26, compared with 5.6% in 1Q26.
Labour productivity per hour worked increased 5.4% to RM44.40, despite total hours worked rising only 0.4% to 5.99 billion hours.
Productivity per employment in services rose 4.2% to RM25,236 per person, while employment increased 1.6% to 10.54 million persons.
Mining rebounds, construction remains positive
The mining and quarrying sector recorded a significant turnaround, with labour productivity per hour increasing 9.1% to RM531.00.
The sector’s value added grew 6.5% to RM19.26 billion, while employment increased 0.5% to 1.42 million persons.
Productivity per employment rose 6.0% to RM13,529 per person.
Agriculture remains a drag
Agriculture was the only major sector to record a decline in labour productivity during the quarter, reflecting a contraction in sectoral output.
The sector contracted 3.7% in 2Q26, with value added at RM24.97 billion compared with growth of 2.6% in 1Q26.
Labour productivity per hour worked declined 4.4% to RM24.40, while productivity per employment fell 3.7% to RM13,218 per person.
Employment in agriculture nevertheless edged up 0.1% to 1.89 million persons, while total hours worked increased 0.8%.
Overall, DOSM’s latest data points to an improvement in Malaysia’s productivity performance in 2Q26, underpinned by stronger manufacturing and services activity alongside continued employment expansion.
