Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group comment on the release of the labour market figures in the Malaysian economy.
Key Takeaways
“The transition into endemicity with a full reopening of the economy and country borders on 1 Apr provided a big boost to Malaysia’s labour market during the month. The national unemployment rate dropped below 4.0% for the first time since Mar 2020 to 3.9% in Apr (Mar: 4.1%), while the labour force participation rate hit an all-time high of 69.4% (Mar: 69.2%).”
“Total employment also recorded the largest gain in six months by 84.1k or 0.5% m/m to a fresh high of 15.85mn (Mar: +38.5k or +0.2% m/m to 15.77mn). This robust improvement was primarily driven by persistent hiring in services, manufacturing and constructions sectors, as well as the resumption of employment in the agriculture sector for the first time in 23 months. The mining & quarrying sector was the only laggard, which still posted a reduction in employment for the 21th straight month.”
“Although the labour market continued to show signs of strength, the recovery is facing significant headwinds due to factors such as global recession fears, elevated business costs, prolonged supply chain bottlenecks, and China’s economic slowdown. Hence, a full labour market recovery back to pre-pandemic levels is still unlikely for now. We maintain our outlook for the unemployment rate to ease further but remain above the pre-pandemic levels at 3.6% by end-2022 (BNM est: ~4.0%, end2021: 4.2%, end-2019: 3.3%).”