Manpower Requirements of Malaysian Manufacturing Sector under the Third Industrial Master Plan

Malaysia’s competitive position is being challenged by emerging economies such as the People’s Republic of China, India, Central European countries and Latin America. To enhance its competitiveness, the nation needs to increase its availability of skilled and knowledge workers in major categories. However, the present mismatch between the supply and demand for skilled workforce will need to be resolved. Hence, several aspects of manpower must be given priority in development planning to ensure that the manufacturing sector continues to contribute towards maintaining Malaysia’s overall global competitive position. This paper attempts to forecast future manpower requirements in industry by different occupational categories under the Third Industrial Master Plan(IMP3). For this purpose, unpublished data from the manufacturing survey and Malaysia inputoutput table will be utilised. The method of forecasting is based on the manpower requirements approach (MRA). The results of our analysis show that the amount of labour required to produce the same unit of output over a period has decreased and output growth is faster than employment growth, implying an increase in labour productivity in the manufacturing sector and other sectors, especially in the high skilled categories.