Recovery of Malaysia’s labour market continued as the jobless rate descended to a new pandemic low 3.8% in Jun-22. Underpin by robust domestic demand and external trade sector, labour force and employment growth hit new record highs +3.1%yoy and +4.2%yoy respectively. Unemployment dipped further by -18.0%yoy, the largest contraction rate ever recorded.
Apart from strong macro fundamentals, MARC believes international borders reopening on the 1st Apr-22 add an extra
booster for labour market recovery particularly the return of foreign workers. Labour market recovery to continue in 2HCY22. Moving forward, we opine Malaysia’s labour market to stay in the recovery trend as indicated by the job-vacancy rate registered at 72.8% in May-22, slightly lower than the record high 74.9% in Feb-22. As for 2HCY22 outlook, MARC believes Malaysia’s economy to stay on an upward trajectory underpin by robust domestic demand, international borders reopening, the revival of construction projects, expansion of primary sectors amid elevated global commodity prices and steady external trade activities.
The number of job vacancies remains strong, 463.9K, slightly lower than the record high seen on Feb-22. This reflects a strong recovery in domestic economic activities fuelled by reflation in local demand and continuous expansion in the external sector. More than 50% of the vacancies are filled by low-skilled jobs namely Elementary Occupations. Share of high-skilled jobs such as Technicians & Associate Professionals improved to 6.9% (Apr-22: 6.4%) while Professionals and Legislators, Senior Officials & Managers descended to 5.7% and 4.1% respectively in May-22. By sector, the services sector share rose to 43.1%, the highest in 5-month. The construction sector booked 14.5%, the highest in 29-month while the manufacturing sector took another 38.4%. The steady rise in vacancy shares of the Services and Construction sectors reflects the impacts of domestic economic improvement including international borders reopening.
Labour market in Malaysia is expected to strengthen further in 2HCY22 underpin by upbeat momentum in the domestic economy and steady expansion in the external sector. Underpin by domestic reopening and strong economic fundamentals, Malaysia’s unemployment rate is projected to trend lower this year to 3.8% in 2022 from 4.6% in 2021. However, the projected jobless rate is still higher than pre-pandemic of 3.4%. Employment growth forecasted at +2.5% (2021: +2.0%) while unemployment to shrink by -15.0% this year (2021: +3.0%). As of 1HCY22, the jobless rate averaged 4.0% while employment growth at +3.3%yoy and unemployment fell by -13.5%yoy.
