Statistics Dept: Labour productivity per person employed down 16pc in Q2 2020

Chief Statistician Malaysia, Datuk Seri Mohd Uzir Mahidin, said: “Value added per employment in this quarter dropped to RM19,455 per person as against the quarterly average of RM22,000 per person. — Picture by Miera Zulyana
Chief Statistician Malaysia, Datuk Seri Mohd Uzir Mahidin, said: “Value added per employment in this quarter dropped to RM19,455 per person as against the quarterly average of RM22,000 per person. — Picture by Miera Zulyana

KUALA LUMPUR, Aug 19 — Malaysia’s labour productivity per person employed shrank 16.0 per cent to RM19,455 in the second quarter of 2020 (Q2 2020) with total hours worked plunging to 6.2 billion from an average of 8.5 billion hours, said the Department of Statistics Malaysia (DOSM).

The figures were published in the Labour Productivity report for Q2 2020 by economic activity, expressed as value added per employment and value added per hour worked.

Chief Statistician Malaysia, Datuk Seri Mohd Uzir Mahidin, said: “Value added per employment in this quarter dropped to RM19,455 per person as against the quarterly average of RM22,000 per person.

“As announced on Aug 14, 2020, Malaysia’s gross domestic product (GDP) for Q2 2020 contracted 17.1 per cent after registering a marginal growth of 0.7 per cent in Q1 2020.

“Employment, which recorded 14.9 million persons (Q1 2020: 15.2 million persons), declined 1.3 per cent as against a positive growth of 1.6 per cent in Q1 2020,” said Mohd Uzir in a statement today.

“The sluggish performance of labour productivity by value added per employment followed the retention of employees, who still had jobs but were on furlough.

“As highlighted earlier in the Labour Force Report for Q2 2020, there were 2.7 million employed persons who were temporarily not working or were not able to work from home due to the movement control order (MCO),” he said.

Elaborating on the labour productivity by value added per hour worked, he said, the total hours worked in this quarter fell 28.2 per cent (Q1 2020: -1.4 per cent) to a total of 6.2 billion hours, lower than the average of 8.5 billion hours per quarter.

Average hours worked in Q2 2020 was only 40.5 hours per week as compared with 44.3 hours per week in the previous quarter. This led to a 15.6 per cent increase in the labour productivity by value added per hour worked to RM46 per hour (Q1 2020: RM40 per hour).

“High growth in labour productivity by value added per hour worked was led by the larger decline in total hours worked as against contraction in value added,” he said.

Among the economic sectors, construction posted the highest fall in labour productivity by value added per employment at negative 40.8 per cent (Q1 2020: -5.3 per cent).

This was followed by manufacturing (-17.3 per cent), mining and quarrying (-17.1 per cent) and services (-15.6 per cent). Agriculture was the only sector posting positive growth during the quarter at 1.5 per cent, rebounding from negative 8.9 per cent.

In terms of labour productivity by value added per hour worked, three sectors posted double-digit growth during the quarter, namely services (17.2 per cent), agriculture (16.1 per cent) and manufacturing (15.2 per cent), while mining and quarrying grew by 6.9 per cent.

Construction was the only sector that declined in Q2 2020, with a rate of 3.2 per cent after registering negative 1.6 per cent in Q1 2020.

Globally, countries that implemented lockdowns to contain the outbreak such as Singapore and the United Kingdom also experienced a similar effect on their labour productivity.

In particular, these two countries posted large declines of value added per employment in Q2 2020 with a rate of negative 11.6 per cent and 22.0 per cent, respectively.

“In principle, the labour productivity influenced growth of gross national income (GNI) per capita whereby a drop in labour productivity growth will lessen the GDP and GNI per capita.

‘It was observed that the country’s GNI per capita was RM36,493 in Q2 2020 as compared with the quarterly average of RM45,000 for the past five consecutive quarters,” said Mohd Uzir.

In Malaysia, the MCO that took effect on March 18, 2020 and the subsequent extensions of the MCO, the conditional movement control order (CMCO) and the recovery movement control order (RMCO), had caused temporary closures of businesses, which have had to adhere to the standard operating procedures in order to resume operations.

All these circumstances have limited employees from working optimally, making Q2 2020 an extreme period for comparisons with historical data. — Bernama

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