PETALING JAYA: The labour market is expected to strengthen further in 2023 underpinned by continuous upbeat momentum in the domestic economy and modest expansion in the external sector, says MIDF Research.
According to the research house, the country’s unemployment rate is expected to decline further to 3.5% but slightly higher than the pre-pandemic level of 3.3%.
“Steady expansion in primary sectors as well as construction and services will prop up more employment opportunities next year,” MIDF Research said in its latest report.
The labour force and employment are also predicted to pick-up by 1.6% respectively this year, it noted.
According to MIDF Research, the recovery of the country’s labour market continued as the unemployment rate maintained at a new pandemic low 3.5% on March.
Labour force and employment continued expanding by 2.3%year-on-year (y-o-y) and 2.9%y-o-y respectively, supported by upbeat domestic economic momentum and expansionary external front.
As for the first quarter of 2023 (1Q23), employment grew 2.9% y-o-y and the average jobless rate was at 3.5% y-o-y, said the research house.
By employment type, workers which made up about 75.6% of the employment grew steadily by 1.7% y-o-y while employer and own-account-worker increased by 6.9% y-o-y and 8.1% y-o-y respectively in March 2023.
Meanwhile, the monthly average job vacancies remained above 200,000, continuing the post-pandemic upbeat momentum (2021: 206,700 and 2022: 396,100).
As a comparison, the monthly average from 2010 to 2019 was at 114,000.
MIDF Research said: “We believe the continuous elevated job vacancies among others supported the steady employment growth and reduction in unemployment as well as outside labour force since early 2021.”In terms of share, there is a steady pick-up rate in the services sector at 65.1% of total vacancies. Vacancies in the manufacturing sector improved from a six-month low of 17.9% to 20.6%.
Hence, MIDF Research expects the average job vacancies to hover between 150,000 and 250,000 per month for 2023 as the post-pandemic economic recovery continues.
On the global front, the job market remained strong despite the tightening monetary policy.
Following the stronger-than-expected hiring in the payrolls, the US unemployment rate descended to a more than 50-year low at 3.4%. Eurozone’s jobless rate descended further to a new record-low of 6.5%.
China’s unemployment rate improved from a three-month high in February to a seven-month low 5.3% in the following month.
