KUALA LUMPUR (Aug 21): Malaysia's labour productivity, as measured by output per hour worked by all persons — including employees, proprietors, and unpaid family workers — grew 3.7% in the second quarter of 2018 (2Q2018), as a result of a 4.5% growth in economic output and a 0.7% rise in total hours worked.

In a statement today, Minister of International Trade and Industry Darell Leiking said out of five main economic sectors, mining and quarrying recorded the highest productivity, with growth registered at 6.2%, followed by construction (5.0%), services (4.9%), agriculture (3.4%) and manufacturing (1.7%).

Leiking said the significant growths in mining and quarrying as well as construction subsectors were due to the higher reduction in total hours worked relative to output growth.

Labour productivity also recorded positive growth across all nine priority sub-sectors outlined under the Malaysia Productivity Blueprint in 2Q2018.

The professional services sub-sector recorded the highest productivity performance in total hours worked with growth at 11.5%, followed by tourism (8.8%), information and communication technology (ICT) (8.6%), agro-food (6.9%), retail and food and beverages (F&B) (5.2%), chemicals and chemical products (4.9%), private healthcare (3.4%), machinery and equipment (2.2%), and electrical and electronic (0.8%).

On a per person basis, Leiking said Malaysia's labour productivity grew 2% in the second quarter 2018, as output grew moderately at 4.5%, while employment grew at 2.4%. Output per labour is calculated by dividing real output by the number of employed person by all persons, including employees, proprietors, and unpaid family workers.

Across the main economic sectors, Leiking said mining and quarrying again recorded the highest labour productivity growth of 5.2%, followed by construction (4%), services (2.5%), manufacturing (1.5%) and agriculture (1.3%).

"Favourable performances of the mining and quarrying and construction sectors are due to the slower growth in employment relative to output growth," he said.

Under the nine priority sub-sectors, professional services again recorded the highest growth at 9.6%, followed by agro-food (6.3%), tourism (5.9%), ICT (5.8%), machinery and equipment (5%), private healthcare (3.9%), retail and F&B (2.6%), chemicals and chemical products (2.5%), and electrical and electronics (1.5%).

Leiking said productivity growth is the key to sustainable living standards rather than sheer accumulation of capital and labour inputs.

In this context, he said Malaysia needs to explore new ways of challenging the frontier, with more efforts put in, to reach the country's annual target productivity growth of 3.7%.

He also said new technologies must be mastered, transformations must be quick and competitiveness must be enhanced for further progress.

"The business climate must remain dynamic to encourage investments in new activities and create new jobs.

"To progress as a society, we must ensure that everyone regardless of age, gender and income level can access better jobs and opportunities to advance. All these can be done though strong collaboration and partnership among the government, academia and industries," he added.