Job market is expected to strengthen

Published on: Friday, August 11, 2023

By: Bernama

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Zafrul

Kuala Lumpur: Malaysia’s labour market is expected to strengthen further in 2023 and 2024, backed by the positive impetuses in the domestic economy, MIDF Research said.It said the average unemployment rate is expected to decline further to 3.5 per cent in 2023 and return to pre-pandemic levels of 3.3 per cent in 2024.

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“The return of non-citizen workers is expected to boost overall employment and reduce the jobless rate,” it said in a note.
As of the first quarter of 2023, non-citizens’ employment was 4.4 per cent lower than the pre-pandemic level.
For the first half of 2023 (1H 2023), employment grew by 2.7 per cent year-on-year (y-o-y) compared with an expansion of 3.5 per cent y-o-y in 1H 2022, while unemployment eased by 10.4 per cent y-o-y (1H 2022: 14.8 per cent) with jobless rate averaging at 3.5 per cent.
Malaysia’s unemployment rate hit a new post-pandemic low at 3.4 per cent in June 2023.

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Labour force and employment expanded by 1.9 per cent y-o-y and 2.3 per cent y-o-y respectively in June, supported by upbeat domestic economic momentum.
“Continued improvement in the labour market will support consumer spending as the wage recipients to employment ratio reached a new peak of 64.5 per cent back in 2021, among others, thanks to the minimum wage salary policy,” it noted.

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Meanwhile, Malaysia’s unemployment rate edged down to 3.4 per cent in June from 3.5 per cent in the previous month, with unemployed people further reduced to 581,700 from 584,600, official data showed Thursday, reported Xinhua.
The Department of Statistics Malaysia (DOSM) said in a statement that Malaysia’s labour market remained stable in June, contributed by the continuous increase in the number of employed people.
Despite Malaysia’s economic outlook being projected to expand moderately, it said the unemployed people in the country were on a downward trend.
According to the DOSM, the number of the employed in June remained on a positive trend, with a month-on-month increase of 0.2 per cent to 16.31 million persons.
Therefore, the number of the labour force in June strengthened further by 0.2 per cent to 16.89 million people.
Meanwhile, June’s labour force participation rate (LFPR) was unchanged at 70 per cent.
For the second quarter of 2023, the number of the labour force continued to post an increase, with a rise of 0.5 per cent to 16.73 million people as compared to the first quarter.
Accordingly, the LFPR rose by 0.2 percentage points quarter on quarter to 70 per cent.
The unemployment rate in the second quarter of 2023 remained at 3.5 per cent as in the previous quarter.
The DOSM expects the labour force’s position in the upcoming months to continue to grow steadily in line with the expectations of Malaysia’s leading index, which anticipates a good economic outlook in the coming months.
Malaysia’s productivity growth in 2023 is expected to be moderate at 3 percent “amid continuous challenges in domestic and global economies,” said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
He said that more needs to be done to boost Malaysia’s productivity and competitiveness to improve the economy.
“Under the recently launched Madani Economy framework, one of the seven targets to be achieved is for Malaysia to be listed in the top 12 in the World Competitiveness Ranking.
“This also implies that our productivity growth is not transformative enough to lift the country out of the middle-income trap economy sooner,” the minister said at the online launch of the Productivity Report (PR) 2023 today.
Tengku Zafrul added that productivity can be improved by the public and private sectors prioritising employees’ wellbeing and supporting a decent standard of living for them.
“When this happens, it is much easier to enhance employee performance and profits, which in turn makes it easier to achieve sustainable productivity.
“All of this means that the Ministry of Investment, Trade, and Industry (Miti) and its agencies have a monumental task ahead. I am confident, however, that all of us are up to the task and committed to achieving those Madani Economy targets,” he said.
The PR 2023, themed “Sustainable Productivity” and launched by the Malaysia Productivity Corporation (MPC), provides details of Malaysia’s productivity agenda.
MPC chairman Datuk Kamaruzzaman Johari said the MPC is committed to amplifying productivity improvement initiatives by focusing on talent, technology, and regulations.
“MPC’s efforts encompass a broad, far-reaching approach.
“Its macro-level interventions, policy recommendations, and framework are curated to enable a productivity-enhanced business environment,” he added.
The PR 2023 noted Malaysia’s commendable productivity, as well as competitiveness, which climbed five places to the 27th position in the World Competitiveness Ranking (WCR) 2023 by the Institute for Management Development (IMD).
This was attributed to the country’s gross domestic product (GDP) growth of 8.7 per cent in 2022 and a stronger-than-expected recovery in productivity at 5.4 per cent.

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