Thailand
More Malaysians are focusing on self-employment
PETALING JAYA: Restrictive measures following the rise in the number of new Covid-19 cases will add pressure on job creation in the fourth quarter, possibly raising the unemployment rate for the year.
Analysts noted that the labour market had benefited from the relaxation of restrictive measures in the third quarter on the back of stronger economic data.
In September, the industrial production rose by 1% year-on-year which is the fastest expansion since July, underpinned by manufacturing. The unemployment rate in September also eased slightly to 4.6% from 4.7% in August – the lowest in five months.
“But there were fewer jobs created during the month, coming in at 39,600 (August: 80,100). The slack could have been absorbed by those under the own-account workers category. This could mean that given the growing challenges in getting jobs, more are focusing on self-employment as a means to make ends meet.
“While third quarter should witness an improving economy, with the gross domestic product during this quarter expected to show a slower contraction of between -2% and -3%, pressure would emerge in the fourth quarter as a result of restrictive measures following the rise in the number of new Covid-19 cases.
“This is likely to add pressure on job creation. Using the official unemployment rate statistics, the unemployment rate should hover around 4.7%–4.9% in 2020, ” AmBank Research said in a report.
Meanwhile, BIMB Securities Research revised its 2020 unemployment rate forecast to 4.2% from 3.9% previously.
“The resurgence of Covid-19 cases and the extension of the conditional movement control order (MCO) affecting most states until early December could contribute to a slower recovery in the labour market.
“The unemployment rate is expected to remain elevated in the coming months and we expect the pace of recovery in the labour market to be slower than what we projected previously, ” it said.
BIMB pointed out that the latest unemployment number remained at a high level compared with the pre-pandemic period as businesses were yet to operate at full capacity.
The unemployment rates in Malaysia were fairly stable, ranging from 2.9% to 3.3% throughout 2010 to 2019.
The government has formulated various initiatives to stabilise the labour market including the Job Search Allowance, PenjanaKerjaya incentives, reskilling and upskilling programmes and short-term employment programme.
“Even as the economic recovery has indeed been going relatively strongly, we are just a bit concerned that enough of the downside risks presented by the ongoing pandemic outbreak in Malaysia, for instance, may materialise to push growth down and affect the fiscal assumptions.
“With the conditional (MCO) restriction orders now affecting most states across Peninsular Malaysia and Sabah, growth, and hence employment, could be affected if the situation does not improve by December, ” BIMB added.
Source: https://www.thestar.com.my/business/business-news/2020/11/11/more-malaysians-are-focusing-on-self-employment