Senior Economist at UOB Group Julia Goh and Economist Loke Siew Ting comment on the publication of the labour market report in Malaysia.
Key Takeaways
“Malaysia’s unemployment rate held at a multi-month high of 4.8% in Jul (Jun: 4.8%; May: 4.5%) after the pandemic-induced lockdown was extended throughout the month for most parts of the country, including main economic hubs like Klang Valley and Johor. An additional 9.5k or 1.2% lost their jobs in Jul as compared to the preceding month, bringing the total unemployed to 778.2k (Jun: +40.6k or +5.6% m/m to 768.7k persons). The labour force participation rate also maintained at the lowest level since Jul 2020 at 68.3% (Jun: 68.3%; May: 68.5%).”
“Total employment posted the second month of reduction by 2.7k or 0.02% m/m to 15.29m persons (Jun: -73.3k or -0.5% m/m to 15.30m persons).”
“In line with our expectations, the labour market will continue to recover albeit at a moderate pace as almost all states or federal territories (except for Johor and Kedah) have been allowed to transition into second, third or fourth phase of the National Recovery Plan. Moreover, with 80% of adult population expected to be fully vaccinated over next two months (vs. 69.6% as of 7 Sep), Malaysia may be able to move into an endemic COVID-19 phase by end-Oct. More sectors will then be reopened with new COVID-19 norms being practised, reinforcing growth and labour market prospects. Hence, we maintain our 2021 year-end unemployment rate estimate at 4.5%.”