Malaysia’s labour market continued on an improving trend as the unemployment rate remained at a post-pandemic low of 3.4% on July 23. Labour force and employment continued expanding +1.9%yoy and +2.2%yoy, respectively, supported by upbeat domestic economic momentum. On a monthly basis, employment grew +0.2%mom, marking the 25th straight month of positive gains. Unemployment dipped further by -6.7%yoy, marking the 23 rd-consecutive months of contraction rate.
MIDF believes the labour market in Malaysia is expected to strengthen further in 2023 and 2024, backed by encouraging momentum in the domestic economy.
The average unemployment rate is expected to decline further to 3.5% in 2023 and return to pre-pandemic levels at 3.3% in 2024. The return of non-citizen workers is expected to boost overall employment and reduce the jobless rate. As of 2QCY23, non-citizens’ employment is almost -2.7% lower than pre-pandemic levels. As of 7MCY23, employment grew by +2.6%yoy while unemployment was reduced by -9.9%yoy, and the jobless rate averaged at 3.5% (2022: 3.8%).
The house added that continued improvement in the labour market will support consumer spending as the wage recipients to employment ratio has reached a new peak at 64.5% in 2021, among others thanks to the minimum wage salary policy.
