Malaysia’s labour market demonstrated sustained strength in the second quarter of 2026, driven by simultaneous expansions in both labour supply and demand alongside a 6.0 percent national economic growth. Data released by the Department of Statistics Malaysia showed the country’s total labour force growing 1.0 percent year-on-year to reach 17.28 million persons, pushing the Labour Force Participation Rate up by 0.1 percentage point to 70.9 percent.
The number of employed persons continuously increased by 1.1 percent year-on-year to 16.77 million persons, which lifted the employment-to-population ratio to 68.9 percent. Concurrently, the number of unemployed individuals declined by 1.6 percent, representing a reduction of 8,100 people, bringing the total to 509.7 thousand persons while keeping the overall unemployment rate steady at 3.0 percent.
Underemployment metrics across the country also showed positive signs of improvement. The number of employed individuals working less than 30 hours per week continued its downward trend, falling 4.8 percent from the second quarter of 2025 to 230.0 thousand persons, which brought the rate of time-related underemployment down to 0.7 percent. Meanwhile, skill-related underemployment, which encompasses tertiary-educated workers in non-matched roles, decreased by 0.5 percentage points to 35.2 percent.
Labour demand across various economic sectors expanded by 1.7 percent year-on-year to record a total of 9.25 million jobs. Out of this total, filled jobs accounted for 97.9 percent after growing by 1.7 percent over the previous year to reach 9.05 million. Job openings, reflected through vacancies in the economy, rose 0.4 percent to 195.7 thousand, whereas the total number of newly created jobs fell 1.2 percent year-on-year to 31.5 thousand.
In tandem with the 6.0 percent national economic expansion, national productivity indicators posted notable gains during the quarter. Labour productivity measured by value added per employment increased 4.9 percent to reach RM26,595 per person. Total hours worked surged by 0.5 percent to 9.58 billion hours, pushing hourly labour productivity up by 5.5 percent to record a value of RM46.5 per hour.
