TA Research forecast a potential decline in the unemployment rate to 3.2% by year-end from the average of 3.3% year-to-date to July 2024.
PETALING JAYA: Unemployment rate is projected to remain stable for the remaining part of 2024, supported by steady economic growth and ongoing recovery efforts across key sectors, according to TA Research.
Despite global uncertainties, Malaysia’s resilient job market, driven by robust domestic demand and government initiatives, is expected to maintain unemployment levels within manageable bounds for the year.
TA Research forecast a potential decline in the unemployment rate to 3.2% by year-end from the average of 3.3% year-to-date to July 2024.
“Malaysia’s economic landscape continues to grow, bolstered by robust household spending, a sustained recovery in the labour market, stronger policy support, increasing exports, rising tourist arrivals, and a significant expansion in investment activities.
“The positive developments in economic and business activities are expected to create more job opportunities and drive income growth, further encouraging labour force participation,” the research house wrote in its report.
“As a result, the labour market is anticipated to remain competitive and stable in the coming months, closely aligned with the country’s broader economic performance.
“The ongoing momentum in key sectors, alongside government initiatives, will likely reinforce labour market resilience and support steady wage growth, maintaining consumer confidence and overall economic stability,” the research house pointed out.
Besides the potential decline in the country’s unemployment rate, TA Research projected that the labour force and employment figures would rise by 1.7% and 2%, respectively.
Similarly, Maybank Investment Bank Research said the job market has entered a “steady state”.
“After moderating to 3.4% last year from 3.8% in 2022, we expect the full-year unemployment rate to average 3.3% in 2024,” it said.
“As the job market settles into a ‘steady state’ from the perspectives of unemployment rate, as well as employment and labour force growth, the key developments are more on workers’ income.
“Certain segments of the workforce will see higher wages and salaries.
“There is also the prospect of minimum wage hike in 2025 from RM1,500 currently,” it added.
Kenanga Research expects hiring activity to remain strong through the rest of the year, as job openings align with stable employment growth as more individuals reenter the labour market seeking better opportunities.
“The steady unemployment rate projection aligns with sustained growth in the services sector, driven by increased tourist arrivals,” it explained.
“Additionally, the manufacturing sector is set for further recovery, backed by the technology upcycle and continued demand from key trading partners,” the research house added.
Kenanga Research revised its average unemployment rate forecast for 2024 to 3.3% from 3.2% previously.
Echoing the same sentiment, Hong Leong Investment Bank Research said the country’s labour market is expected to remain stable for the rest of the year, supported by rising tourism activities, a further expansion in exports and the implementation of job-related initiatives under the various national masterplans.
“The healthier labour market, alongside supportive domestic policies, will then continue to shore up consumer spending and lend support to overall economic growth,” it said, adding that it maintained its 2024 gross domestic product (GDP) growth forecast at 5%.
Kenanga Research also maintained its GDP growth forecast at 5%, citing better-than-expected performance in the first half of 2024, driven by strong domestic demand.
“However, we expect GDP growth to moderate slightly to 4.8% in 2025, influenced by a high base effect and heightened global economic uncertainty, particularly the performance of the US and China economies,” the research house said.
