Kenanga Research maintained its average unemployment rate forecasts at 3.5% in 2023 and 3.3% in 2024.
PETALING JAYA: Malaysia’s job market is expected to strengthen further towards the end of this year, albeit at a moderate pace.
This positive outlook is supported by the expected increase in hiring in the coming months as the country’s economy continues to grow.
Kenanga Research, for one, noted that the labour market had shown resilience in recent months despite the ongoing global economic slowdown, with the unemployment rate remaining stable at 3.4% in August 2023.
“This stability is primarily attributed to sustained month-on-month (m-o-m) employment growth, bolstered by government initiatives and a gradual rebound in tourism activities driven by increased tourist arrivals and spending,” it said in a report.
“Domestic demand remained a steadfast pillar supporting this growth. That said, the labour market is poised to maintain its strength throughout the rest of the year, characterised by expanding hiring activities.”
Kenanga Research maintained its average unemployment rate forecasts at 3.5% in 2023 and 3.3% in 2024, as compared to actual jobless rates of 3.8% in 2022 and 4.6% in 2021.
Its projected gross domestic product growth for 2023 stood at 3.5% to 4%.
Data from the Statistics Department showed the labour market had remained on a recovery trajectory in August 2023, with the unemployment rate steady at 3.4% for the third consecutive month.
This was supported by growth in employment at 2.1% year-on-year (y-o-y) and labour force at 1.8% y-o-y during the month in review.
For the eight months to August 2023, the unemployment rate averaged at 3.5%.
Notably, the number of unemployed persons fell for the 25th consecutive month in August 2023 to reach 557,300 from 579,200 in July 2023.
This was the lowest number of unemployed persons since February 2020, indicating that the labour market condition had gradually returned to pre-pandemic level.
Hong Leong Investment Bank Research said Malaysia’s labour market was anticipated to continue its recovery, backed by continued growth in the domestic economy.
“The implementation of catalytic initiatives under the latest national masterplans as well as new job-related measures that may be announced in the upcoming Budget 2024 could also provide additional support to the employment landscape.
“Nevertheless, the pace of recovery is expected to be modest in view of the rising global uncertainty,” it said.
Noting that the unemployment rate in August was near pre-pandemic levels of 3.3%, TA Research said the positive trend in Malaysia’s labour market was a clear indication of the country’s gradual economic recovery, which had been significantly aided by government initiatives such as wage subsidies and job placement programmes.
“The decline in the number of unemployed individuals during the month was particularly pronounced among the youth, with a decrease of 0.6% m-o-m for those aged 15 to 24 years and 1.2% m-o-m for those aged 15 to 30 years,” it said, citing official data.
“These statistics suggested that the economy is effectively meeting the demand for job placements and bolstering opportunities for young job seekers,” it added.
TA Research said if the positive trend continued, unemployment rate would sustain at the current rate until year end. On average, it projected the jobless rate for 2023 to be 3.4%.
Meanwhile, Maybank Investment Bank Research kept its unemployment rate forecast unchanged at 3.5% for 2023, implying the monthly jobless rate would largely move sideways or in a tight range this year.
“This is panning out as jobless rate steadying at 3.4% to 3.5% in February-August 2023 after trending down from 4.2% in January 2022 to 3.6% in September 2022 to January 2023.
“The ‘sticky’ unemployment rate so far this year also reflects the trend in worker retrenchment, which has been rising since February 2023 up to the latest data as of August 2023,” it said.
