The remarkable transformation of the Malaysian timber sector from a net-importer to a multi-billion-dollar export-oriented sector has become a success model for many other resource-rich countries throughout the world. In view of the increasing socioeconomic importance of the timber sector in this country, the productivity performance of the six major timber sub-sectors was investigated in this study. Productivity is defined as the ratio of output to input and was analyzed from the year 2010 through 2014. The productivity performance was evaluated based on certain input factors, namely labor and capital. Generally, the productivity of the timber sector can be regarded as stagnating. Furthermore, the value-added was affected due to high reliance on labor for production. Among the factors that account for this lack of productivity growth are the increased competition in the international market, small domestic market, improper industrial development policies, poor adoption of technology, and the high dependency on human capital.

In the first part of this study, the Kelly repertory grid technique was used to determine the most preferred attributes of overlay materials used in wood-based panel furniture in Malaysia. This was followed by a questionnaire survey of 20 large wood-based panel furniture manufacturers to establish the trends in the use of overlay materials and the success factors of their utilization. The results showed that natural wood veneer was the most preferred overlay material, and the common local veneer species used included kembang semangkok, rubberwood, and bintangor. Meanwhile, the predominant imported veneer species were white oak, white ash, and walnut. The factor analysis showed that the properties of the overlay materials and market preferences were the driving factors for their successful utilization. The results clearly showed that natural wood veneer was preferred due to its wood-like, natural, and living attributes, and customers were prepared to pay a price premium for furniture with wood veneers compared to the other types of overlay materials.