The singer - who is signed to Simon Cowell's Syco record label - said that he is a fan of Arthur's voice and songwriting skills.
"He's sick. I've heard his own songs and they're amazing – he's got soul," he told BBC Radio 1's Fearne Cotton.
He added that it wouldn't necessarily be a bad thing if Arthur did not win the competition, considering the success of past contestants such as Olly Murs and JLS.
"Being honest I'd rather him lose X Factor, because I'm sure he's still going to have an amazing career."
James Arthur narrowly avoided leaving the competition via a Deadlock decision at the expense of Ella Henderson on Sunday.
Labrinth and Arthur previously performed together on stage at a gig in Manchester last month. The pair sang a duet of Labrinth's hit 'Earthquake'.
Arthur was quoted as saying at the time: "It was a totally unreal experience being on stage with Labrinth. He put on a great show and is a real hero of mine. It was a honour to be able to perform with him."
Labrinth recently stated that he doesn't set out to score number one hits such as 'Beneath Your Beautiful'.
X Factor latest show pictures:
Copyright: Ken McKay/Thames/Rex Features