Recovery of Malaysia’s labour market continued as the unemployment rate maintained at a new pandemic low of 3.5% in March 2023. Labour force and employment continued expanding +2.3%yoy and +2.9%yoy, respectively, supported by upbeat domestic economic momentum and an expansionary external front.
On a monthly basis, employment growth at +0.2%mom. Unemployment dipped further by -12%yoy, marking the 19th consecutive month of contraction rate. In addition, the outside labour force was reduced by -1.1%yoy, registering the 17th-straight month of negative growth rate. Youth aged 15~24 unemployment rate descended further to a new pandemic low of 11.2% but remained higher than pre-pandemic (2019: 10.4%). By employment type, employees who made up about 75.6% of the employment grew steadily by +1.7%yoy while employer and own-account-worker increased by +6.9%yoy and +8.1%yoy respectively in Mar-23. As for 1QCY23, employment grew by +2.9%yoy (4QCY22: +3.2%yoy) and the average jobless rate was 3.5% (4QCY22: +3.6%yoy). The strengthening of the job market according to MIDF will further reinforce consumer consumption and support overall GDP growth particularly registering above +5%yoy for 1QCY23.
Monthly average job vacancies remained above 200K, continuing the post-pandemic upbeat momentum (2021: 206.7K, 2022: 396.1K). In comparison, the monthly average during 2010-2019 was 114K. We believe the continuously elevated job vacancies among others supported the steady employment growth and reduction in unemployment as well as outside labour force since early 2021. In terms of share, steady pick-up in the services sector at 65.1% of total vacancies. Vacancies in the manufacturing sector improved from a 6-month low at 17.9% to 20.6%. MIDF said it foresees average job vacancies to hover between 150~250K per month for 2023 (2022: 396.3K) as the post-pandemic economic recovery continues.
The house is keeping its average jobless rate forecast at 3.5% in 2023 with the labour market expected to strengthen further in 2023 underpinned by continuous upbeat momentum in the domestic economy and modest expansion in the external sector. MIDF said it foresees Malaysia’s unemployment rate to decline further to 3.5% yet slightly higher than the pre-pandemic level of 3.3%. Steady expansion in primary sectors as well as construction and services will prop up more employment opportunities next year.
Labour force and employment are predicted to pick up by +1.6% respectively this year.
