Labour productivity sees improvement in third quarter

KUALA LUMPUR: Malaysia’s labour productivity improved with a smaller decline of 2.2 per cent in the third quarter of 2020 (3Q20) compared to negative 16.0 per cent in 2Q20, said the Department of Statistics Malaysia (DOSM).

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said Malaysia’s labour productivity in 3Q20 registered a mild decline of 2.2 per cent at RM23,248 per person (2Q20: RM19,446 per person).

“During this quarter, gross domestic product (GDP) decreased at a slower rate of 2.7 per cent from the doubledigit contraction of 17.1 per cent in 2Q20.

“Following the reopening of more businesses during the quarter, employment decreased marginally by 0.4 per cent to 15.1 million persons (2Q20: 14.9 million persons, -1.3 per cent),” he said in a statement in conjunction with the release of the Labour Productivity report, Third Quarter 2020, yesterday.

The figures in the report were published by economic activity, expressed as value added per employment and value added per hour worked.

Commenting on the labour productivity denoted in the report, Mohd Uzir said longer business operation hours in 3Q20 resulted in total hours worked to decline at a slower rate of 2.7 per cent, recording 8.5 billion hours against negative 28.2 per cent (6.2

During this quarter, gross domestic product (GDP) decreased at a slower rate of 2.7 per cent from the double-digit contraction of 17.1 per cent in 2Q20. Datuk Seri Dr Mohd Uzir Mahidin

billion hours worked) in the previous quarter.

“Hence, labour productivity by value added per hour worked grew marginally 0.1 per cent with a value of RM41 per hour a er registering an increase of 15.5 per cent (RM46 per hour) in 2Q20,” he said.

By economic sector, labour productivity by value added per employment in manufacturing rebounded to 3.6 per cent from negative 17.3 per cent in 2Q20.

Agriculture, which was the only sector that recorded a positive growth of labour productivity in 2Q20 (1.6 per cent), moderated to 0.3 per cent in 3Q20.

Labour productivity for other sectors remained sluggish with construction posting the highest decline of 10.2 per cent, followed by mining and quarrying (-4.6 per cent) and services (-3.9 per cent).

In terms of labour productivity by value added per hour worked, he said, the manufacturing and agriculture sectors continued to record positive growth in the previous quarter, albeit at slower rates of 6.9 per cent (2Q20: 15.2 per cent) and 0.6 per cent (2Q20: 16.1 per cent), respectively.

Construction continued to decline for three consecutive quarters, recording the highest fall of 9.0 per cent. In the meantime, labour productivity for mining & quarrying fell 4.5 per cent while services decreased 1.4 per cent.

“As the country continues to contain the Covid-19 pandemic, businesses faced challenges of maintaining the right balance between ensuring continuity of business operations amid slower demand.

“While the businesses adjust their operation strategy, employees also need to adapt to the new normal.

“All of these would have an impact to the overall labour productivity. In this regards, the various stimulus packages provided by the government this year may ease the predicaments of all parties, including businesses and employees, and subsequently safeguard their sustainability,” he said.