Malaysia’s unemployment rate edged lower to 3.2% in October, bringing the total number of unemployed persons to 512,100

By ALIFAH ZAINUDDIN / Pic By TMR File

KENANGA Investment Bank Bhd (Kenanga IB) has revised its unemployment forecast down to 3.3% this year from an initial target of 3.5%, as the labour market remains steady despite a slowing growth trend in 2019.

Malaysia’s unemployment rate edged lower to 3.2% in October, its lowest in nine months, bringing the total number of unemployed persons to 512,100. The figure also represents a decline of 1.8% or 9,300 persons from the 521,400 recorded in September.

At the same time, the overall labour force expanded by 2.1% to 15.78 million persons from 15.45 million persons a year ago, as new job creations increased to 35,700 during the month.

The labour force participation rate remained at 68.75% for the second consecutive month in October, but increased 0.2 percentage point from 68.5% in the same month the year prior.

“The latest manufacturing Purchasing Managers’ Index (PMI) survey also highlighted that employment levels remained stable though the PMI reading stayed in contraction for 14 straight months, albeit improving.

“Optimism towards the US-China phase-one trade deal may also support the expansion in domestic hiring activities in spite of a weaker global outlook on growth and trade activities going forward,” Kenanga IB stated in a labour market report yesterday.

Global labour conditions have remained stable with the jobless rate in the US at its lowest in nearly five decades at 3.5% in November, partly due to the return of workers at General Motors Co after a 40-day strike. Over in Europe, unemployment was steady at 6.3% in October, its lowest since 2000.

Malaysia’s unemployment rate has remained unchanged at 3.3% in the last three quarters this year.

Bank Negara Malaysia forecasts the rate to maintain between 3.3% and 3.5% this year, underpinned by steady expansion in the services and manufacturing sectors and the recovery of commodity supplies.

The central bank added that the rollout of government policies such as the tiered levy and social security contribution for foreign workers will eventually reduce the country’s reliance on foreign labour and spur the creation of higher-skilled, higher-income jobs in the economy.

Meanwhile, the Finance Ministry in its Economic Outlook 2020 report issued in October expected the nation’s unemployment rate to remain at 3.3% next year, with the number of employed persons projected to increase to 15.1 million in 2019 and 15.3 million in 2020.

Of the 15.3 million people expected to be employed in 2020, about 62.1% are anticipated to be recruited in the services sector, according to the ministry.

Kenanga IB’s assessment comes two days after the Department of Statistics Malaysia released two data sets comprising its monthly labour force statistics and an employment statistic on graduates.

The latter showed that Malaysia produced 4.96 million graduates last year, which accounted for 20.3% of the country’s working age population. Out of this, 96.1% or 3.99 million graduates were employed in 2018, while unemployed graduates stood at 3.9% or 162,000 persons.