The Statistics Department reported that the number of unemployed individuals decreased to 546,700 in November 2024, reflecting a 3.2% unemployment rate.
PETALING JAYA: Economists are generally bullish over Malaysia’s labour market in 2025, propelled by steady domestic demand, strong economic expansion and sustained labour-force participation.
The optimistic outlook is bolstered by labour statistics from November 2024, which showed that the unemployment rate had kept stable at 3.2% month-on-month (m-o-m), with employment seeing a steady expansion of 0.2% m-o-m, while the number of unemployed had declined at a faster pace of 0.9% in November compared with October’s 0.7% decrease.
Hong Leong Investment Bank Research (HLIB Research), in a note to clients yesterday, said the continued realisation of approved investments, which increased to RM254.7bil for the first nine months of 2024 from RM230.2bil for the same period a year earlier, is also expected to spur job creation, lending support to household spending.
Citing Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, the research house reported that 98.4% of investment projects from 2021 to March 2024 have either been completed, are in progress or are in their planning stage, paving the way for job creation in Malaysia.
At the same time, BIMB Securities Research pointed out that the November unemployment rate was at the lowest level since January 2020, just before the pandemic lockdown period, while labour force participation remained at a record-high 70.5%.
“These figures highlight accelerated employment growth and expanding opportunities, reflecting the country’s solid economic performance,” the research house said.
Looking ahead, it anticipates that 2025 is poised to bring continued labour market stability, underpinned by stronger domestic growth and improved trade prospects, with the unemployment rate expected to remain at a healthy 3.2%, signalling near-full employment.
BIMB Securities Research said: “Key growth sectors, including manufacturing, electrical and electronics and services are anticipated to drive job creation.
“Malaysia’s tourism sector is also positioned for robust growth, with the ambitious ‘Visit Malaysia 2026’ campaign targeting 35.6mil international visitors and RM147.1bil in tourism receipts. Notably, the visa exemption period for Indian citizens has been extended until Dec 1, 2026, enhancing accessibility.”
On the flipside, the research house said that risks to labour-market stability remain in the form of geopolitical tensions and a potentially sluggish recovery in trade.
It said that shifts in US trade, economic and foreign policies could significantly impact Malaysia’s manufacturing sector – the second largest employer after services – and ripple through the broader economy.
“Despite these uncertainties, however, Malaysia’s labour market remains resilient, with its diverse economic drivers and strategic initiatives poised to support sustained growth and job creation in the years ahead,” said BIMB Securities Research.
Notably, HLIB Research said in terms of unemployment duration, the share of people unemployed for less than three months increased to 62.6% in November from October’s 62.2%, while the share of unemployed for three to less than six months and for six months to less than 12 months were unchanged.
In contrast, it said the share of unemployed for longer durations of more than a year declined marginally from 6.4% in October to 6% in November.
Meanwhile, Kenanga Research predicted that the final quarter of 2024 (4Q24) was likely to record the lowest quarterly unemployment rate since 4Q19, signalling a return to pre-lockdown levels.
Having said that, the research house projected that 2024 gross domestic product growth would remain at 5%, before moderating slightly to 4.8% this year, reflecting the base effect and rising external uncertainty amid heightened geopolitical tensions and normalising economic activity.
