NATIONAL PRODUCTIVITY POISED TO RISE TO 4pc

Higher global growth will help boost Malaysia’s trade, investments, income inflows and domestic demand

THE national productivity level is likely to rise four per cent this year on the back of strong growth momentum. Malaysia Productivity Corp (MPC) said improvements in global growth would enhance the country’s trade, investment and income inflows as well as drive strong increases in domestic demand.

Last year, labour productivity grew 3.5 per cent to RM78,218, led by the manufacturing and services sector.

Among selected Asian countries, in terms of labour productivity per person employed in US dollar, Malaysia, at US$21,564, is ahead of Thailand (US$10,398), China (US$14,030), Indonesia (US$7,507) and the Philippines (US$7,536).

Although it fell short of the 3.7 per cent productivity growth per annum targeted under the 11th Malaysia Plan, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said it had driven the national economy to post 4.2 per cent growth last year.

He said the lower outcome was mainly due to financial market volatility and uncertain business confidence.

“We will see better growth prospects this year,” he said when launching the Productivity Report 2016/2017 here yesterday.

At a media briefing later, he said the setting up of the national productivity council would oversee the targets of the Malaysia Productivity Blueprint in order to lift Malaysia’s productivity levels.

“The private sector is setting up the first phase of the productivity nexus starting with the electrical and electronics, chemicals and retail sectors, out of the nine earmarked sectors.”

Productivity champions from these sectors would ensure that best practices be transferred to companies still lagging behind, he added.

Mustapa also highlighted the five challenges which Malaysia should address in its quest to improve productivity levels — talent, technology, industry structure, business environment and productivity mind-set.

“Over-reliance on low-skilled and foreign workers, as well as having an unclear strategy to meet demands of the future economy have certainly slowed down Malaysia’s productivity growth,” he said.

Limited investments in technologies and digitalisation, and its adoption across enterprises, have also affected the ability of Malaysian businesses, especially small and medium enterprises, to transform.

The outcome of the blueprint, which covers the workforce of the future, digitalisation, ecosystem and implementation, will be a game changer for productivity improvements in Malaysia, and shifting mind-sets from “business-as-usual”, enhancing competitiveness and productivity.