PETALING JAYA: The country’s labour market is on track to rebound to pre-pandemic levels, underpinned by a further recovery in the domestic economy which is set to spur business activities.
According to the Statistics Department, the number of employed persons continued to increase to 15.57 million persons in the first quarter of 2022, exceeding the pre-pandemic level of 15.25 million persons recorded in the fourth quarter of 2019.
MIDF Research said it expects the labour market to remain rosy, driven by the reopening of the country’s borders.
“Looking ahead, we expect Malaysia’s labour market to stay in a steady recovery trend as indicated by the job vacancy rate, which shot to a record high of 74.9% in February 2022.
“On top of that, the reopening of international borders will push higher operating capacity in the domestic economy such as aviation, tourism, construction and manufacturing sectors.
“As an oil-exporting economy, Malaysia is set to benefit from soaring global commodity prices, particularly the palm oil and oil and gas sectors,” it said in a report yesterday.
The country’s unemployment rate has also softened to 4.1% in the first quarter of 2020. But it is still far behind the pre-pandemic level of 3.4% in 2019.
MIDF Research said it expects Malaysia’s unemployment rate to trend lower this year, underpinned by a further recovery in the domestic economy, continuous upbeat momentum in global trade and skyrocketing commodity prices.
“With the announcement of international borders reopening, Malaysia’s labour market recovery remains on a steady path following the possible return of non-citizens workers.
“However, we view the return of foreign workers would be at a modest pace amid labour rules and Covid-19 measures that need to be satisfied.
“Hence, we keep our average unemployment rate forecast at 4% for this year, higher than the pre-pandemic level of 3.4%,” it said.
In 2020, the country’s unemployment rate surged to 4.55%, the highest in 20 years as many businesses were forced to shut down due to a slowdown in economic activities as a result of the Covid-19 pandemic.
Unemployment rate for youths aged 15 to 24 years remained high at 13.1% or 361,000 persons in March 2022, compared to 13% in February 2022.
In the first quarter of 2022, the Statistics Department said Malaysia’s labour force participation rate (LFPR) escalated by 0.3 percentage points to 69%, the highest LFPR recorded since the first quarter of 2020 but remained below its pre-pandemic ratio of 68.8%.
It expects the labour market to continue to expand further in the coming months as the country moves into an endemic phase.
“The transition phase to endemicity as well as the easing of several more restrictions, including the reopening of the country’s borders to the public are seen to stimulate further the country’s economy.”