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Malaysia: Market on better footing as jobs roll in
PETALING JAYA: As more jobs were added in June with the headline unemployment rate dropping to the lowest level since Covid-19 hit, it seems that Malaysia’s labour market is heading towards a sustained recovery.
The month of June saw the largest contraction rate ever recorded for unemployment, dropping by 18% year-on-year, according to MIDF Research.
The research house also opined that there were bright prospects for the labour market as vacancies remained high.
“The number of job vacancies (in May) remained strong at 463,900, slightly lower than the record high seen in February 2022,” it said in a note.
However, taking a microscopic view of the latest employment figures, it was also evident that youth unemployment remained high in June, with almost half-a-million youth jobless.
In addition, about 1.8 million people with tertiary education suffered from skill-related underemployment in the second quarter.
Yesterday, the Statistics Department reported that the headline unemployment rate in June fell to 3.8%, on the back of 630,600 jobless individuals.
In the same month last year, there were about 768,700 unemployed persons, with an unemployment rate of 4.8%. Meanwhile, in May 2022, there were about 637,700 jobless persons, bringing the unemployment rate to 3.9%
It is noteworthy that the number of unemployed persons in Malaysia has been declining for eleven consecutive months up till June 2022.
Amid the improving economic activities and various government initiatives, the Statistics Department expects the labour market to continue to recover in the upcoming months.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed pointed out that the labour market has remained in “full employment” throughout the second quarter of 2022.
Full employment refers to an unemployment rate of below 4%, based on the definition set by the Organisation for Economic Co-operation and Development or OECD.
“The overall recovery momentum is the result of government initiatives under the leadership of the Prime Minister, such as the ‘JaminKerja’ employment incentives programme and the creation of the national job portal, MyFutureJobs.
“All these initiatives represent the government’s commitment to improve the well-being of Keluarga Malaysia,” Mustapa said in a statement yesterday.
The minister also added that the labour market performance in June 2022 was in line with the stronger economic activities following the transition to the endemic phase in the whole country.
“The demand for labour has increased, thus opening up more job opportunities in the market,” said Mustapa.
In June 2022, the number of employed persons continued to trend up, with an addition of 36,300 persons or 0.2% month-on-month higher to 15.94 million persons.
The employment-to-population ratio, which indicates the ability of an economy to create employment, edged up by 0.1 percentage points to record 66.9% in June as against 66.8% in May 2022.
Based on a year-on-year comparison, the ratio went up by 1.9 percentage points.
“By economic sector, the number of employed persons in the services sector continued to strengthen, particularly in food and beverage service activities, wholesale and retail trade; and administrative and support service activities.
“A similar trend was observed in the agriculture, manufacturing and construction sectors, while the mining and quarrying sector persistently registered a decline in employment,” according to the Statistics Department in its report yesterday.
Despite the improvement in the labour market conditions, the Statistics Department highlighted that there were about 474,700 unemployed youth aged 15 to 30 years in June. The unemployment rate for this age group was 7.4%, almost double the national unemployment rate of 3.8%.
As for the age group of 15 to 24 years, there were 343,900 unemployed youth in June, albeit the fact that the unemployment rate dipped by 0.3 percentage points to 12.2%.
The Statistics Department also reported the country’s skill-related underemployment was recorded at 36.7% in the April to June 2022 period.
There was only minimal change in the skill-related underemployment level, considering that it once hit 37.9% at the height of the pandemic. Skill-related underemployment refers to those with tertiary education but work in the semi-skilled and low-skilled categories.
As of the second quarter of 2022, about 1.8 million persons suffered from skill-related underemployment, with females slightly outnumbering males at 907,300 persons and 892,300 persons, respectively.
Looking ahead, MIDF Research forecasts the jobless rate to be lower at 3.8% for the full-year of 2022. “The labour market in Malaysia is expected to strengthen further in the second half of 2022,” it said.
Source: https://www.thestar.com.my/business/business-news/2022/08/10/market-on-better-footing-as-jobs-roll-in