Unemployment rate remained at 3.5% for the fourth consecutive month and also averaged at 3.5% in 5M 2023, said Maybank Investment Bank (Maybank IB) in a recent report.
Youth unemployment edged down to 11.0% in May 2023, still above the pre pandemic low of 9.9% in Dec 2019. Jobs growth little changed at +2.4% in May 2023 amid broad-based increases across sectors, including informal jobs.
“Maintain our 2023 unemployment rate forecast of 3.5%,” said Maybank IB.
Unemployment rate was stable at 3.5% in May 2023 for the fourth month as the number of unemployed declined by -8.3% YoY and -0.4% MoM reflecting faster growth in employment relative to the rise in the labour force.
According to the Department of Statistics, jobs growth continued its uptrend for the Services sector, notably Food & Beverage, Wholesale & Retail Trade and Information & Communication, as well as Manufacturing, Construction, Mining & Quarrying and Agriculture sectors.
Based on the latest monthly manufacturing statistics, the sector’s employment and wages & salaries eased for the third consecutive month. On a quarterly basis , the combined manufacturing and services employment growth and salaries and wages growth slowed for the second quarter in a row.
Meanwhile, workers retrenchment increased by +18.2% YoY to 21,371 in 1H 2023 vs -47.9% YoY decline to 18,076 in 1H 2022.
Youth unemployment rate moderated for seven straight months to 11.0% in May 2023 but remained above the pre-pandemic low of 9.9% in Dec 2019.
Another notable structural trend that partly contributed to the dip in youth unemployment is the rise in informal jobs/workers given the sustained increase in “Own Account Workers” since Jan 2021. It rose further to 2.935m in May 2023 from 2.92m in Apr 2023, approaching the record high of 2.945m back in Oct 2018. To also highlight, growth in informal jobs surpasses total employment growth.
“Maintain our 2023 unemployment rate forecast of 3.5%. Amid our forecast of slower real GDP growth of +4.5% this year, our annual jobless rate forecast implies monthly jobless rate to largely move sideways during the course of 2023 after trending down in 2022 i.e. from 4.2% in Jan 2022 to 3.6% in Sep 2022 – Jan 2023. This is happening as jobless rate stayed at 3.5% in Feb-May 2023, hence 5M2023 average of 3.5%,” said Maybank IB.
