KUALA LUMPUR: The Malaysian labour market is projected to remain stable in 2025, boosted by better domestic and foreign economic growth prospects.
According to the 2025 Economic Outlook Report released by the Finance Ministry on Friday (Oct 18), the unemployment rate is forecast to improve further to 3.1% in 2025, while total employment is projected to grow by 2.1% to 16.6 million people.
"More than 80% of employment opportunities concentrated on the services and manufacturing sectors," it said.
The report also stated that the government's strategies to address structural issues in the labour market, particularly related to wages and productivity, are expected to enhance business efficiency and boost labour demand.
Although the number of low-skilled foreign workers is expected to remain at about 2.5 million people to accommodate the needs of labour-intensive industries, the government will continue to monitor the approval of new hiring in this category to ensure it aligns with the threshold of 15% from total employment.
The report said that the implementation of the multi-tiered levy system as well as the adoption of automation and advanced technology are also expected to support policies towards reducing dependence on low-skilled foreign workers.
However, the hiring of expatriates is projected to increase marginally to meet the demand for skilled talent in critical jobs.
To facilitate the hiring process for skilled talent, the government will introduce a green lane for the highest tier of Employment Pass applications to support the growth of strategic industries as stated under the New Industrial Master Plan (NIMP 2030).
The report also added that labour productivity is projected to rise by 2.7% to RM101,700 in 2025, driven by the wider adoption of advanced technologies, digitalisation and modern management practices to enhance value chains in high growth high value (HGHV) industries.
Meanwhile, detailing the labour market conditions in 2024, the report stated that the sector showed consistent improvement in the first half of the year, spurred by robust economic growth, whereby the labour force participation rate rose significantly to 70.5%.
The 3.9% increase in total employment to 16.2 million people compared to the 3.5% rise in labour force to 16.8 million people contributed to a significant decline in the unemployment rate to 3.2% or 534,500 people.
"The total number of retrenchments remained low at 25,796 people as of the end of June 2024, while job vacancies registered over 748,900 positions, with over 50% being semi-skilled and low-skilled jobs.
"As of the end of August 2024, the number of registered low-skilled foreign workers grew by 41.1% to about 2.5 million people compared to 1.8 million people for the corresponding period in 2023, with the majority coming from Bangladesh (37.8%), Indonesia (23.7%) and Nepal (16.7%)," the report added.
Currently, low-skilled foreign workers stand at 14.8% of total employment, closing in on the allowable threshold of 15%.
The number of expatriates also increased by 6.3% to 113,493 people as at end-August 2024, with the majority hailing from China (24.1%), India (18.3%), and the Philippines (8%).
The report added that most of them were hired in the information technology (38.7%), services (26.8%) and construction (10.5%) sectors. – Bernama
