Malaysia’s unemployment rate edged down to 3.3% in November (Oct: 3.4%), the lowest since January 2020, indicating that the labour market has improved and returned to the pre-pandemic level.
Unemployed persons (-0.3% MoM; Oct: -0.5%): extending its decline for 28 months, but the pace
slowed to a three-month low. − In absolute terms, the number of unemployed persons fell to 569.2k (Oct: 570.9k), the lowest since February 2020 (525.2k). Additionally, the actively unemployed fell to 454.5k (Oct: 457.2k), the lowest
since March 2020 (422.9k). Employment growth expanded for 28 months and at a steady pace (0.2% MoM; Oct: 0.2%).
The rise in employment is mainly attributable to the increased hiring in the services sector, particularly in
information & communication, food & beverage services, and transportation & storage activities. Similarly, the manufacturing, construction, and mining sectors also contributed to the expansion.
Labour force participation rate remained at a record level (70.1%; Oct: 70.1%) for the fifth straight month as the total labour force increased slightly higher than the total working population. Labour force: growth expanded (0.2% MoM; Sep: 0.1%) to a five-month high, with the total labour force reaching a record high of 17.0m persons.
Stable unemployment rate across advanced economies
− US: remains unchanged in December (3.7%; Nov: 3.7%), with the number of unemployed persons staying at 6.3m.
− Japan: unchanged in November (2.5%; Oct: 2.5%), with the job availability ratio edged down to 1.28.
Average unemployment rate for 2023 is likely to settle at 3.4%, slightly lower than our forecast of 3.5% (2022:
3.8%) and is projected to reduce further to an average of 3.3% in 2024
The labour market conditions have demonstrated a steady expansion, as reflected by a steady decline in the
unemployment rate. This is expected to be sustained in the near term, mainly benefiting from improving
international markets, particularly China’s post-pandemic recovery and the influx of tourists. Robust domestic
demand, on the back of resilient household spending amid the upcoming festive season, is also expected to support
the hiring activities.
That said, Kenanga expects the labour market to continue its robust performance in the near term and throughout 2024,
with the unemployment rate to average at 3.3%, barring unexpected and economically destructive events. This
outlook is also associated with further economic improvements, with a projected 2024 GDP growth of 4.9%, from
an estimated range of 3.5% – 4.0% in 2023 (2022: 8.7%).
