The economy is producing more per hour of work, but the rate of improvement is slowing. Labour productivity grew 4.8% year-on-year in Q1 2026, down from 5.8% in Q4 2025, according to the Department of Statistics Malaysia (DOSM). 

Output per worker also rose 4.3% to RM26,171 per person, as total employment grew 1.0% to 16.7 million persons while total hours worked increased by 0.5%.

Construction And Manufacturing Led Growth

Construction posted the strongest gains, with productivity per hour worked rising 7.8% to RM22.50, supported by a 7.7% expansion in sector value added. The sector has expanded consistently since 2024, driven by ongoing infrastructure activity.

Manufacturing grew 5.8% per hour worked to RM60.00, with electrical, electronic and optical products the standout subsector at 11.9%. Services grew 4.5% to RM43.40 per hour, led by food and beverages and accommodation at 8.2%.

Mining And Quarrying Slipped Into Negative

Agriculture grew a modest 3.6% to RM24.30 per hour. Mining and quarrying was the only sector to contract, declining 2.4% to RM537.60 per hour, tied to a 2.1% drop in value added from weaker crude oil and natural gas output.

The productivity picture mirrors GDP in Q1 of 2026, with construction and manufacturing doing the heavy lifting while momentum eases from the highs of late 2025. The same sectors driving output growth are also the ones where workers are getting more done per hour.

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Iman Aminuddin

Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.

About THE AUTHOR

Iman Aminuddin

Iman Aminuddin

Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.

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