Malaysia’s labour market strengthened further in 2025, with the unemployment rate falling to 3.0%, the lowest level in a decade and below the pre-pandemic rate of 3.3% recorded in 2019.
According to the Labour Force Survey 2025 released by the Department of Statistics Malaysia (DOSM), the labour force expanded by 184,600 people, or 1.1%, to a record 17.09 million compared with 16.90 million in 2024. This pushed the labour force participation rate to an all-time high of 70.8%, up from 70.6% a year earlier.
Employment also continued to grow, with the number of employed persons increasing by 211,500, or 1.3%, to 16.58 million. The employment-to-population ratio rose to 68.7% from 68.4% in 2024, reflecting the economy’s improved ability to generate jobs.
The number of unemployed persons declined by 5.0% to 507,200 from 534,100 in the previous year, reinforcing the continued recovery of Malaysia’s labour market.
Across the states, labour force participation improved nationwide. Putrajaya recorded the highest labour force participation rate at 79.0%, followed by Selangor at 78.4%, Kuala Lumpur at 75.8%, Penang at 72.2% and Johor at 72.0%.
Putrajaya also posted the country’s lowest unemployment rate at 1.1%, ahead of Melaka at 1.6% and Pahang at 1.8%. Meanwhile, Sabah continued to record the highest unemployment rate at 7.2%, followed by Labuan at 6.3%, Perlis at 3.9%, and Kelantan and Perak, both at 3.5%.
The survey also showed that the number of people outside the labour force edged up by 0.2% to 7.03 million, with women accounting for 69.5% of the total.
