Malaysia: Labour market remains healthy – UOB

FX

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting comment on the publication of the Malaysian jobs report.

Key Takeaways

“Malaysia’s labour market continues its steady march towards full recovery with the number of employed persons and unemployment rate improving further. Total number of employed persons rose for the 11th month by 36.3k to 15.94mn in Jun. The non-seasonally adjusted unemployment rate edged lower to 3.8% while the seasonally adjusted rate fell to 3.6%, a shade above the prepandemic unemployment rate of 3.3%.”

“Employment gains recorded in the services sector particularly in food & beverages, wholesale & retail trade, and administrative & support services activities. Agriculture, manufacturing and construction sectors also saw job gains while the mining & quarrying sector recorded further declines in employment. The worker segment that is temporarily not working but had jobs to return to declined further to 87.8k (vs 801.1k in Jun 2021). Workers who are unemployed for more than 12 months also eased to 35.0k or 6.6% of total actively unemployed (vs 62.9k or 9.8% in Jun 2021).”

“According to the Monster Employment Index (MEI), Malaysia’s job market recorded 31% growth in job demand with 5% increase in hiring activities in Jun. Several key industries continue to face labour shortages as reopening activities spur demand. Despite the improvement, the employment outlook waned in 2Q22 amid more cautious consumer and business sentiment. Elevated costs, supply chain disruptions, and rising recession risks could moderate the recruitment drive. We maintain our yearend unemployment rate target of 3.6% (BNM est: average ~4.0%).”

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