Malaysia: Jobless rate held steady at 3.4% in September – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting give their views on the latest release of the labour market report in Malaysia.

Key Takeaways

Malaysia’s labour market continued to see gradual improvement with both labour force and employment hitting an all-time high at 16.95mn and 16.38mn respectively in Sep. Both unemployment rate and labour force participation rate also held steady at 3.4% and 70.1% respectively. 

There was a broad-based increase in hiring across economic sectors, led by services particularly wholesale & retail trade, food & beverage services and transportation & storage activities. The employment-to-population ratio maintained at 67.7%, signaling the ability of the Malaysian economy to create employment.  

Nevertheless, with rising external headwinds and uncertainties denting business sentiment and unemployment rate easing at a slower pace than we had initially anticipated over the past few months, we tweak our year-end jobless rate projections slightly higher to 3.3% for both 2023 and 2024 (from 3.2% previously). This will translate into an average of 3.4% for the entire year of 2023 (MOF est: 3.5%. 2022: 3.9%) and 3.3% for 2024 (MOF est: 3.4%). Job related measures announced under Budget 2024 are key drivers of further improvement in the labour market going into 2024, barring any ugly turn in the global outlook.