PETALING JAYA: The labour market is expected to improve further throughout this year even as the country’s unemployment rate returned to the pre-pandemic level of 3.3% last November.

       The steady decline in jobless Malaysians is likely to sustain in the near term mainly benefiting from improving international markets, particularly China’s post-pandemic recovery and the influx of tourists, said Kenanga Research.

       Robust domestic demand, on the back of resilient household spending with the upcoming festive season, is also expected to support the hiring activities.

       Kenanga Research said the unemployment rate will likely average at 3.3% this year as compared to 3.4% in 2023.

       On last November’s unemployment rate of 3.3%, the research house noted that it was the lowest since January 2020.

       “Unemployed persons in percentage terms extended their decline for 28 months, but the pace slowed to a three-month low.

       “In absolute terms, the number of unemployed persons fell to 569,200 – the lowest since February 2020. Additionally, the actively unemployed fell to 454,500 – the lowest since March 2020,” it said.

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       The research house also pointed out that the country’s employment growth expanded for 28 months and at a steady pace of 0.2% month-on-month (m-o-m) in November 2023.

       UOB Kay Hian Research (UOBKH Research), in a separate note, said Malaysia’s labour market “technically reached” full employment last November.

       The labour force participation rate kept steady at 70.1% last November, which was the fifth month in a row, implying favourable and stable labour market conditions.

       However, UOBKH Research highlighted that the number of unemployed persons remained above the monthly average of 518,900 in the pre-pandemic year of 2019.

       This was despite the number of unemployed persons dropping further by 1,700 or 0.3% m-o-m to 569,200.

       “This suggests that a continuation of government policy support remains vital to uphold the full employment conditions,” it said.

       Looking ahead, UOBKH Research said there are several positive domestic drivers to underpin the labour market outlook in the near term.

       “They include improving tourism activities, continued implementation of infrastructure projects, further realisation of committed investments, execution of blueprints, and government’s job initiatives.

       “Taken together, we stick to our view that Malaysia’s economy will maintain its full employment conditions with the national unemployment rate holding steady at 3.3% by end-2024,” it added.

       Meanwhile, TA Research expects the unemployment rate to average at 3.2% in 2024, supported by the robust domestic economy.

       In addition, it said the success of the second labour recalibration programme (RTK 2.0) is poised to significantly contribute to the growth of the country’s labour market.

       As of October 2023, about 518,000 undocumented migrants have been issued new work permits under RTK 2.0, integrating them into key sectors such as manufacturing, construction, farming, agriculture, and services.

       Comparatively, the preceding RTK 1.0, operational from November 2020 to December 2022, witnessed the registration of 418,649 undocumented migrants, involving 30,137 employers.

       “The cumulative impact of both programmes underscores a concerted effort to formalise employment for undocumented migrants, fostering a more regulated and inclusive labour market environment,” it added.