The labour market is expected to strengthen further in 2023, underpinned by upbeat momentum in the domestic economy and modest expansion in the external sector, said MIDF Research.
It noted that Malaysia’s average jobless rate is expected to descend from 3.8 per cent in 2022 to 3.5 per cent in 2023, but slightly higher than the pre-pandemic level of 3.3 per cent.
“Malaysia’s job market in 2023 is anticipated to continue benefiting from firm domestic demand, China’s reopening, the revival of construction projects, expansion of primary sectors thanks to elevated global commodity prices, and modest external trade activities.
“In addition, we view that the recently concluded general election should reduce domestic politics temperature and allow for better and smooth implementation of fiscal policy,” the research house said.
MIDF Research said initiatives for labour market recovery and domestic economic growth should be among the major elements in the upcoming re-tabling of Budget 2023 and the midterm review of the 12th Malaysia Plan.
It said steady expansion in primary sectors as well as construction and services will prop up more employment opportunities next year, thereby labour force and employment are predicted to pick up by +1.6 per cent respectively this year.
MIDF Research also noted the continued recovery of Malaysia’s labour market with the unemployment rate staying at 3.6 per cent in November 2022.
“The labour force and employment continued expanding +2.5 per cent year-on-year (y-o-y) and +3.2 per cent y-o-y, respectively, supported by robust domestic economic growth and upbeat external front.
“Unemployment dropped further by 13.5 per cent y-o-y, marking 15 consecutive months of contraction rate,” it said.