Malaysia’s labour productivity climbs to RM46.3 per hour in Q4 2025

Malaysia’s labour productivity strengthened in the fourth quarter of 2025, supported by solid economic growth, rising employment, and broad-based gains across sectors, according to the Department of Statistics Malaysia (DOSM).

Labour productivity per hour worked increased 4.9% year on year to RM46.3, signalling continued efficiency gains in the economy.

Chief Statistician Mohd Uzir Mahidin said Malaysia’s economy expanded by 6.3% in Q4 2025, up from 5.4% in the previous quarter, underscoring improving economic momentum.

During the same period, total hours worked rose 1.4% to 9.9 billion hours, while employment grew to 17.1 million persons, reflecting a 1.8% year-on-year increase (Q3 2025: 17.0 million persons; 1.5%).

Labour productivity per employment also improved, rising 4.4% to RM26,765 per person, compared with RM26,122 in the preceding quarter.

Construction leads sectoral gains

Measured by value added per hour worked, productivity growth was recorded across all major sectors.

Construction posted the strongest increase at 10.3%, followed by manufacturing (6.4%), agriculture (5.5%), mining and quarrying (5.1%), and services (4.0%).

Services buoyed by hospitality and digital activity

Within the services sector, most subsectors reported productivity improvements.

Food and beverages and accommodation led with a 7.9% rise, followed by other services (7.2%), information and communication (6.4%), transportation and storage (5.6%), real estate and business services (2.8%), and wholesale and retail trade (2.4%).

Utilities (-1.0%) and finance and insurance (-0.8%) were the only subsectors to register declines.

Manufacturing growth broad-based

Manufacturing productivity per hour worked improved across nearly all subsectors, except transport equipment, other manufacturing, and repair activities, which declined 2.7%.

The strongest gains were seen in vegetable and animal oils and fats and food processing (15.8%), electrical, electronic and optical products (11.4%), and beverages and tobacco products (10.6%).

More modest increases were recorded in non-metallic mineral, basic metal and fabricated metal products (4.1%), textiles (2.3%), wood products (2.0%), and petroleum-related industries (1.5%).

Productivity per employee also rises

Measured by value added per employment, all sectors recorded growth, though at varying rates. Construction again led with a 10.1% increase, followed by agriculture (5.4%), manufacturing (5.1%), services (3.7%), and mining and quarrying (1.3%).

Within services, information and communication rose 7.3%, transportation and storage 5.7%, food and beverages and accommodation 5.1%, real estate and business services 4.9%, wholesale and retail trade 3.2%, utilities 1.5%, and other services 5.9%. Finance and insurance declined by 0.7%.

In manufacturing, productivity per employee expanded on the back of strong gains in electrical, electronic and optical products (10.7%), vegetable and animal oils and fats and food processing (9.8%), and beverages and tobacco products (5.8%).

However, transport equipment, other manufacturing, and repair activities recorded a 1.7% decline.

Full-year outlook remains positive

For the full year 2025, labour productivity per hour worked grew 3.7% to RM44.5, up from RM42.9 in 2024. Productivity per employment rose 3.4% to RM102,672 per person, compared with RM99,265 previously.

DOSM noted that all sectors maintained stable positive momentum throughout the year. “Malaysia's labour productivity is well positioned towards a positive outlook in 2026, supported by a stable labour market and sustainable economic performance throughout the year,” Dr Uzir said.