Malaysia’s unemployment stayed at 3.4% in Sep 2023 (Aug 2023: 3.4%) despite slower employment growth (Sep 2023: +2.0% YoY; Aug 2023: +2.1% YoY) that outpaced steady labour force growth (Sep 2023: +1.8% YoY; Aug 2023: +1.8% YoY).
Maybank Invetment Bank (Maybank IB) cited today (Nov 9) that jobs increases were registered across all sectors, including faster growth in manufacturing jobs and income, as well as informal jobs which hit new record high.
The bank maintains their unemployment rate forecasts of 3.5% for 2023 and 3.4% for 2024 (8M 2023: 3.5%; 2022: 3.8%).
Jobs growth outpaced labour force expansion
The unemployed rate remained at 3.4% in Sep 2023 for the fourth straight month reflecting despite slower employment growth (Sep 2023: +2.0% YoY; Aug 2023: +2.1% YoY) which outpaced labour force growth (Sep 2023: +1.8% YoY; Aug 2023: +1.8% YoY).
The number of unemployed fell -5.2% YoY and -0.6% MoM (Sep 2023: 573.7k; Aug 2023: 577.3k). According to the Department of Statistics, jobs growth in Sep 2023 was broad-based, anchored by sustained growth in the Services sector, particularly in the Wholesale & Retail Trade, Food & Beverage and Transportation as well higher employments in the Manufacturing, Construction, Mining & Quarrying and Agriculture sectors.
Based on the latest monthly manufacturing statistics, there were pickups in growth of manufacturing employment (Sep 2023: +2.4% YoY; Aug 2023: +2.0% YoY) as well as wages & salaries (Sep 2023: +3.2% YoY; Aug 2023: +3.0% YoY).
Informal jobs hit fresh new high
Youth unemployment fell to 10.6% in Sep (Aug 2023: 10.8%) but remained above pre-pandemic low of 9.9% in Dec 2019, while under-employment rate remained “sticky” as it eased marginally to 11.8% in 3Q 2023 from 11.9% in 4Q 2022 – 2Q 2023.
Informal jobs/workers i.e. “Own Account Workers (i.e. daily income earners working as petty traders, hawkers, food stalls operators as well as smallholders plus gig workers) has been rising since Jan 2021 (2.39m), and continued its climb to a new record of 2.974m in Sep 2023 from 2.966m in Aug 2023, exceeding the. pre-pandemic record high was 2.945m in Oct 2018, as growth in informal jobs (9M 2023: +6.9%; 2022: +9.7%) outpaced total employment growth (9M 2023: +2.5%; 2022: +3.5%).
Maybank Ib keeps their 2023 and 2024 unemployment rate forecast of 3.5% and 3.4% respectively while maintain their 2023 unemployment rate forecast of 3.5% (9M 2023: 3.5%; 2022: 3.9%) which implies monthly jobless rate largely moving sideways or in a tight range this year.
This is panning out as jobless rate steadying at 3.4%-3.5% in Feb-Sep 2023 after trending down from 4.2% in Jan 2022 to 3.6% in Sep 2022 – Jan 2023.
The “sticky” unemployment rate so far this year also reflects the trend in workers retrenchment which has been rising YoY since Feb 2023 up to the latest data as of Aug 2023 (+115.1% YoY and 6.5% MoM to 4,560) to result in +32.3% YoY increase in 8M 2023 to 30,214 (8M2022: -49.3% YoY to 22,841; 2022: -44% to 34,339).
