The country’s unemployment rate held steady at 2.9% in March 2026, marking the fifth consecutive month at the lowest level since November 2014, as continued hiring in the services sector helped sustain labour market resilience despite rising external risks.
According to a research note by Kenanga Investment Bank, the number of unemployed persons rose marginally by 0.4% month-on-month to 509,000 in March from 506,800 in February.
The report noted that actively unemployed individuals — those available for work and actively seeking jobs — increased slightly to 405,800 from 404,700 previously, although their share of total unemployment eased to 79.7% from 79.9%.
Employment meanwhile continued to expand, rising 0.1% month-on-month in March, supported mainly by hiring in the services sector, particularly accommodation and food and beverage services, transportation and storage, as well as information and communications activities.
Kenanga said employment also improved in manufacturing, construction and agriculture. However, separate manufacturing data showed factory employment declined for a second straight month by 0.1% to 2.41 million workers, while payrolls contracted 0.2%.
Average manufacturing wages edged slightly lower to RM3,547 in March from RM3,550 in February.
By employment status, own-account workers recorded the strongest monthly growth at 0.3%, followed by employers at 0.2% and employees at 0.04%. Unpaid family workers, however, declined by 0.2%.
Malaysia’s labour force participation rate remained unchanged at 70.9% for the third consecutive month, while the labour force expanded modestly by 0.1% to 17.31 million people.
Kenanga noted that labour market conditions across parts of Asia showed signs of mild softening in March, with unemployment rates inching up in Japan and Taiwan amid seasonal job transitions.
Despite growing geopolitical and trade-related uncertainties, the research house maintained its 2026 unemployment rate forecast at 2.9%, slightly improved from 3.0% in 2025.
It said Malaysia’s labour market should remain supported in the near term by firm domestic demand, policy support measures and services-sector hiring linked to the Visit Malaysia 2026 campaign.
Kenanga added that continued demand in the electrical and electronics (E&E) sector, ongoing public sector recruitment and education reforms would also underpin labour demand.
Data from Perkeso’s MYFutureJobs showed active job vacancies climbed to 112,429 as of April 30 from 85,362 in March, while loss of employment cases rose to 6,297 from 5,855 previously.
However, the research house cautioned that risks to the labour market could intensify in the second half of 2026 if global growth slows further or trade frictions escalate again.
Kenanga maintained its 2026 GDP growth forecast at 4.5%, expecting growth to stay above 5.0% in the first half of the year before moderating later amid potential supply disruptions and softer external demand.
