UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the latest labour market figures in the Malaysian economy.
Key Quotes
“Malaysia’s unemployment rate climbed further to a 7-month high of 4.9% in Jan (Dec: 4.8%) after the reinstatement of Movement Control Order (MCO 2.0) starting 13 Jan. Number of unemployed rose by 1.2% or 9.7 thousand from the previous month to 782.5k (Dec: +1.1% to 772.9k), while the labour force participation rate inched up to 68.5% (Dec: 68.4%).”
“Overall employment improved for the second straight month by 0.1% or 21.9 thousand from the previous month to 15.24m in Jan (Dec: +0.1% m/m to 15.22m)… While the construction sector turned around to register an increase in employment, both agriculture and mining & quarrying sectors continued to record declines in hiring for seven months.”
“Despite the higher unemployment rate, labour conditions showed some signs of recovery amid higher labor force participation rate, and a larger increase in number of employed persons relative to unemployed suggesting that businesses are starting to rehire. With almost all economic activities allowed to resume and the global economy improving, we think the labour market should regain momentum from 2Q21 onwards. Several government initiatives offers ongoing support for the labour market while progressive roll-out of vaccines and containment of pandemic will help lift sentiment. We project the unemployment rate at 4.0% by end-2021.”
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