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Malaysia: Jobless rate expected to trend lower this year
PETALING JAYA: The local labour market is expected to continue on its recovery path this year based on recent trends.
This is premised on expectations that vaccination rates will continue to stay high and effective which will likely help keep Covid-19 under control.
TA Research said it is expecting the jobless rate to trend lower at the range of 3.5%-4.0% this year, due to the domestic economic recovery and a continued pickup in external demand.
“Moreover, the labour market will continue to be supported by the excellent progress of the vaccination rates, improving business sentiment and various government initiatives such as the Wage Subsidy Programme, PenjanaKerjaya, Reskilling and Upskilling Program, amongst others,” TA Research said.
TA also noted that the current employment trend is still weak at the moment although a slight improvement is expected in the future.
“With more consumers expecting better job opportunities in line with a further recovery in the domestic economy, we assume the unemployment rate to stabilise mainly due to the brighter prospect of sectors that were previously hit by the Covid-19 crisis,” it said.
On an annual basis, TA Research said the Malaysian labour market continues to be in a challenging position last year as the number of unemployed persons continued to increase for the second year to 741.4 thousand persons from 711.3 thousand persons in 2020.
It noted that the average jobless rate of 4.6% in 2021 saw the highest unemployment rate since 1993 at 4.1%.
“We observed that the higher unemployment rate of 4.8% was recorded in the first half of the year before improving to 4.5% in the second half of the year,” it said.
Meanwhile, Hong Leong Investment Bank Research was more optimistic and said the outlook for labour market recovery remains optimistic with nationwide economic activity at near full swing.
Kenanga Research was more cautious and said the labour market may experience a bumpy recovery in the near term due to surging Covid-19 cases of the Omicron variant.
“Nonetheless, the impact may not be as severe as 2020, given the high vaccinated population rate and aggressive vaccine booster campaign,” Kenanga Research said.
“Therefore, the labour market is expected to continue to recover slowly and possibly hit our average forecast figure of 3.9% for the whole year, reaching full employment level in line with the broad recovery in the most economic sectors,” it added.
Source: https://www.thestar.com.my/business/business-news/2022/02/10/jobless-rate-expected-to-trend-lower-this-year