Malaysia’s 2016 labour productivity up by 3.5 per cent

The agriculture sector registered an improved growth of 3.4 per cent at RM55,486 compared with -2.3 per cent in 2015.

Datuk Seri Mustapa Mohamed, International Trade and Industry Minister

KUALA LUMPUR: Malaysia’s labour productivity grew by 3.5 per cent to RM78,218 in 2016 from RM75,548 previously, said International Trade and Industry Minister, Datuk Seri Mustapa Mohamed.

He said the result, slightly lower than the 3.7 per cent annual growth targeted under the 11th Malaysia Plan ( 2016 to 2020), was mainly due to the financial market’s volatility and uncertain business confidence.

Two top sectors that contributed to the growth were manufacturing with a productivity level of RM106,647 (+1.4 per cent) and services at RM68,166 (+ 2.8 per cent).

“The agriculture sector registered an improved growth of 3.4 per cent at RM55,486 compared with -2.3 per cent in 2015,” said Mustapa, when launching the Productivity Report 2016/ 2017 yesterday.

The report, themed, “Challenging the Frontier, Empowering People”, was published by the Malaysian Productivity Corporation.

Among selected Asian countries, in terms of labour productivity per person employed in US$, 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).

However, the report said, Malaysia’s productivity growth was behind China at 6.6 per cent, Indonesia (4.6 per cent) and the Philippines (4.4 per cent).

It is however, important to note, that Malaysia started from a relatively higher base.

To date, the country has achieved 84.7 per cent of the 11th Malaysia Plan’s targeted level of RM92,300 by 2020.

Moving forward, the report said Malaysia has to keep abreast of the latest developments and embrace the Fourth Industrial Revolution, which would transform the design, manufacture, operation and service of products and production systems worldwide.

“Initiatives focusing on the competitiveness of Malaysia’s exports, adaptation of new technology and capacity building towards a high-quality workforce are essential prerequisites in preparing for the future, ”it said. In striving for higher productivity growth, the report indicated that Malaysia must prepare for uncertain external factors, as shifts in economic policies could affect a diverse range of outcomes for the Malaysian economy and local labour market conditions.

It said such externalities can be mitigated by stronger collaboration among stakeholders through the establishment of various productivity nexus.

Meanwhile, asked if Malaysia can achieve its annual growth target for this year, Mustapa was optimistic in view of better growth prospects and the future outlook.

He pointed out that industry would be less labour intensive going forward as Malaysia looks towards automation.

“For that reason, if we are successful in fully embracing the fourth industry revolution, the chances of growth will be higher,” he said.