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Malaysia: Improving jobs market
PETALING JAYA: Labour market conditions in Malaysia are expected to continue improving this year, with more jobs available amid the recovery in domestic economic activities.
According to economists, the February 2023 unemployment rate, which fell to its lowest since the Covid-19 pandemic, was already pointing to a trend of further recovery in the country’s labour market.
Data from the Statistics Department showed that Malaysia’s unemployment rate in February 2023 had eased to 3.5% – the lowest since the Covid-19 pandemic hit in March 2020 – from 3.6% in January 2023.
The improvement was underpinned by higher employment across all sectors.
TA Research said the positive trend in Malaysia’s unemployment rate was indicative of the country’s gradual economic recovery, which had been facilitated by the government’s initiatives such as wage subsidies and job placement programmes.
“As the labour market stabilises and the economy continues to grow, it creates the potential for investment opportunities in Malaysia’s labour market,” the brokerage wrote in its report.
“Furthermore, this growth can attract more investors and generate additional business opportunities, thereby contributing to the long-term growth and development of the country,” it explained.
TA Research maintained its view of a continued downward trend in the country’s jobless rate.
“We forecast an average rate of 3.5% for this year.
“The rate is predicted to hover between the 3.4% and 3.6% levels,” it said.
In absolute terms, the number of unemployed persons had declined for 19 straight months and at the fastest pace in five months, reflecting robust hiring in February 2023.
During the month in review, there were 591,900 unemployed persons – the lowest since February 2020 – as compared to 596,100 in January 2023.
Hong Leong Investment Bank (HLIB) Research said Malaysia’s labour market was expected to continue on its recovery path in 2023, as labour demand remained favourable.
This was expected to be supported by continued growth in social and economic activities, particularly in the tourism sector, it noted.
“The pace of improvement, however, may moderate in the coming months in view of the lingering economic headwinds on the external front and the normalisation of labour market conditions,” HLIB Research wrote in its report yesterday.
The brokerage maintained its forecast of a 4.5% growth in gross domestic product (GDP) for 2023.
Meanwhile, Kenanga Research, which maintained its 2023 GDP growth forecast at 4.7%, projected the country’s unemployment rate to average at 3.5% this year, an improvement from the average of 3.8% in 2022.
“We remain cautious about the recovery in the labour market conditions although the labour market has demonstrated a sustained recovery due to an increase in domestic economic activities amid a gradual pick-up in the tourism-related sector,” the brokerage said.
“This is likely due to the prospect of a global economic slowdown that could largely weigh on the export-related industries,” it added.
Kenanga Research, however, expects various policy support measures, such as the opening up of 19,000 vacancies for teachers, 1,500 new appointments for the healthcare sector and 50,000 job placement opportunities via the Malaysian short-term employment programme or MySTEP, to further alleviate the unemployment rate.
MIDF Research maintained its average jobless rate forecast for Malaysia at 3.5% for 2023.
It said the labour market in Malaysia was expected to strengthen further this year, underpinned by the upbeat momentum in domestic economy and modest expansion in the external sector.
“We foresee Malaysia’s unemployment rate to decline further to 3.5%, yet slightly higher than the pre-pandemic level of 3.3%.
“Steady expansion in primary sectors as well as construction and services will prop up employment opportunities next year,” it said.
Source: https://www.thestar.com.my/business/business-news/2023/04/12/improving-jobs-market