UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting comment on the publication of the labour market report in Malaysia.
Key Takeaways
“Most labour market indicators showed further improvement in the first month of 2022, except for the unemployment rate which stayed at 4.2%. The labour force participation rate continued to hit a new all-time high at 69.1% (Dec 2021: 69.0%).”
“There were also continued signs of better employability with hiring breaching another new record level at 15.69m (Dec: 15.65m). The 37.5k or 0.2% m/m jump in total employment in Jan was primarily driven by increased hiring in services, manufacturing, and construction sectors. This, again, fully counteracted the persistent decline in agriculture and mining & quarrying employment since Aug 2020.”
“We foresee brighter job market prospects following the government’s announcement yesterday (8 Mar) that Malaysia will transition into an endemic phase of COVID-19 and fully reopen its borders to all international travellers from 1 Apr 2022. Having said that, there are still ongoing challenges (i.e. rising business costs, lingering pandemic risks, and escalating Russia-Ukraine conflict and sanctions) to entirely remove the labour market slack this year. Thus, we stick to our view that Malaysia’s jobless rate will remain higher than the pre-pandemic level of ~3.3% at 3.6% by end-2022.”