Value Addition and Labour Productivity in the Malaysian Furniture Industry Between 1986 and 2004
The Malaysian furniture industry is the most important sub-sector within the wood-based industry, yet its growth is a matter of intense debate. On a general basis, it is argued that the Malaysian furniture industry is a low wage economy, producing low quality furniture. Therefore, this study aims...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2009
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| Online Access: | http://psasir.upm.edu.my/id/eprint/10171/1/FH_2009_15_A.pdf |
| Summary: | The Malaysian furniture industry is the most important sub-sector within the
wood-based industry, yet its growth is a matter of intense debate. On a general
basis, it is argued that the Malaysian furniture industry is a low wage economy,
producing low quality furniture. Therefore, this study aims: (1) to compare the
performance of the furniture industry during the periods of the first and second
Industrial Master Plans (IMP) of Malaysia, (2) to identify the trend in labour
productivity, expressed as the ratios, during the same period, and (3) to
quantitatively study the relationship between labour productivity and value
addition in the furniture industry.
Secondary published data on the furniture industry were collected mainly from the
Department of Statistics Malaysia (DOS), for the period 1986 to 2004. A set of
productivity indicators such as value added, labour productivity ratio, and capital
productivity ratio were used in the analysis, as suggested by the National
Productivity Corporation (NPC) Malaysia.
During 1986 – 2004, value addition in the furniture industry grew steadily from
RM 85 million to RM2,536 million, and labour productivity recorded a positive
growth trend from 1990 (RM12,900) to 2004 ((RM32,400). The results showed
that there was a positive trend in annual gross output and cost of input, which
increased by about RM524 million annually and RM369 million annually,
respectively, but the value addition and labour productivity were still low. The
continuous growth of output was largely due to the increased number of factories,
workforce and gross inputs. However, from the increasing cost of inputs,
especially the labour cost and raw materials cost, the Malaysian furniture industry
remains low in value addition. It confirms that the Malaysian furniture industry is
still a mass producer of commodity-type furniture. This study provides evidence
to support the argument that the industrial growth in the Malaysian furniture
industry has been driven primarily by incremental input factors. |
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