PETALING JAYA: Malaysia’s labour market is poised for continued stability and growth throughout the year, buoyed by economic activities and supportive government policies, analysts say.
To note, earlier this week, the Statistics Department reported that the country’s unemployment rate remained at 3.3% for the sixth month in a row in April 2024.
The size of the labour force in April 2024 has increased marginally to 17.12 million persons, up from 17.1 million in March, with the labour force participation rate at 70.3%.
Kenanga Research expects the labour market to maintain its positive momentum in 2024, forecasting the average unemployment rate in 2024 to settle at 3.2% against the 3.4% in 2023, with expectations of sustained hiring towards the end of the year.
“The labour market is expected to remain stable throughout 2024, with positive hiring activities bolstered by strong expansion in the services sector and supported by recovery in manufacturing sector,” the research outfit said, adding that this aligns with its gross domestic product growth forecast of between 4.5% and 5% in 2024 versus the 3.7% in 2023.
Additionally, Kenanga Research expects the realisation of record approved investment worth RM329.5bil recorded last year and ongoing government multi-year infrastructure projects detailed in Budget 2024 to boost hiring activities in the coming months.
Similarly, Hong Leong Investment Bank (HLIB) Research sees gradual improvements in the labour market, owing to the domestic economy and external demand.
“Malaysia’s labour market is expected to continue improving modestly going forward, supported by the continued positive momentum in the domestic economy and recovery in global trade, particularly in the manufacturing sector and tourism sector,” it noted.
HLIB Research also said the implementation of government projects outlined in national masterplans and the realisation of approved investments would provide additional support to the employment landscape.
Meanwhile, Maybank Investment Bank Research (Maybank IB) Research projects a sustained low unemployment rate in 2024, having already moderated to 3.4% in 2023 from 3.8% in the previous year.
Taking cue from the 3.3% average in the first four months of 2024, the research firm now expects a full-year unemployment rate average of 3.3% in 2024 against its previous forecast of 3.4%.
It pointed out that workers’ retrenchment spiked by 38.2% year-on-year and 25.9% month-on-month to 4,894 in May 2024.
“However, the continued trend of low and stable jobless rate as well as decline in the numbers of unemployed suggest the retrenched workers were able to find new employment,” Maybank IB Research noted.
The research house highlighted that youth unemployment is still ‘sticky’ at 10.6% for six consecutive months in April 2024 and has remained within the 10.6% and 10.8% range since August 2023, thus still above the pre-pandemic low of 9.9% in December 2019.
TA Research, on the other hand, is also optimistic about the labour market’s future, forecasting a decrease in the jobless rate to 3.2% by year-end.
