chapter 6 - Malaysia Productivity Corporation ( MPC)

supported by both capital and labour which grew
by 0.2% and 0.7% respectively. However, to achieve
higher TFP growth, it is pertinent that the farming
communities move towards more capital intensive
and farm operations and operate the farms on the
commercial scales which will be led by the private
sector especially the large established anchor
companies.
TFP growth for the manufacturing sector recorded
0.8% to an output growth of 4.3% while capital and
labour contributed 2.5% and 1.1% respectively.
This is in line with the Government’s policy to
transform the manufacturing sector to be more
competitive for the period of 2002-2011. The
bulk of the manufacturing sector’s value added
was attributed to the shift towards more capital
deepening business operations. This was justified
by the large investment in advanced machineries
for potential industries such as medical devices,
aircraft and equipment and energy saving devices.
The construction sector registered TFP growth
of 0.6% contributing 17.3% to output growth of
2.8% while capital and labour grew by 2.1% and
Table 2.2: TFP Growth of Economic Sectors, 2002-2011 (%)
Capital
Labour
TFP
Output
CHAPTER 2
0.01% respectively. TFP performance rebound due
to improve economic and business conditions,
Government incentives, rising household
income, favourable labour market condition
to accommodate the strong demand for both
residential and non-residential properties. TFP
growth can be further improved to the adoption of
more advanced building design and system such
as Building Information Modelling (BIM), Green
Building Index (GBI) and Industrialised Building
System (IBS).
As for the mining sector, it registered a contraction
in TFP growth of 3.5% while output, capital and
labour grew by 0.4%, 3.7% and 0.2% respectively.
As the nature of this sector is capital intensive,
contribution to TFP growth was derived mainly
from capital inputs. Despite increase in activities
for the sector during recent years, growth in output
was weak and TFP continued to register a decline.
This was due to the lagging gestation period
between the capital investment and its realisation
as well as the maintenance period which was part
of the energy conservation initiatives.
Agriculture Mining Manufacturing Construction
Services
0.24
0.65
2.54
3.48
3.74
0.19
-3.53
0.42
2.51
1.07
0.75
4.33
2.12
-0.01
0.63
2.75
0.83
1.82
3.23
5.90
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