August’s unemployment rate remained at 4.7%

Some challenges will hinder the labour market recovery in the upcoming months following the rising cases of Covid-19, says DoSM


UNEMPLOYMENT rate in Malaysia remained at 4.7% in August as the number of unemployed individuals decreased marginally on a month-on-month (MoM) basis by 3,500 individuals to 741,600 from 745,100 individuals in July.

The unemployment rate, however, increased by 1.4% year-on-year (YoY) compared to 3.3% recorded in the same month last year, with the number of unemployed persons increasing by 221,400 individuals from 520,200.

The country saw a marginal increase of 0.5% in employment to 15.15 million individuals last month compared to 15.07 million recorded in July.

“It was observed that the monthly increase of employed persons was in the range of 80,000 to 102,000 persons since June 2020.

“Meanwhile, YoY comparison, employed persons declined by 0.2% against August 2019 (15.19 million persons),” said the Department of Statistics Malaysia (DoSM) in a report released yesterday.

It said the employment-to-population ratio, which indicates the ability of an economy to create employment, rose 0.3% to 65.2% in August (July: 64.9%) although the ratio declined 1.2% from 66% recorded in August last year.

Employment in the services sector saw an increase, mainly in wholesale and retail trade, accommodation and food and beverages, as well as information and communication activities last month.

Meanwhile, the manufacturing sector, which was the second-largest contributor in the economy, recorded a drop in employment.

“During August 2020, the Industrial Production Index for manufacturing declined 1.9% MoM compared to the marginal growth of 0.2% in the previous month. This slower momentum has impacted a decline of employed persons in the manufacturing sector during the month,” said DoSM.

Employees category also increased by 72,600 in August to 11.72 million individuals, while own-account workers increased for the first time since April 2020 and accounted for 2.42 million individuals in August (July: 2.38 million).

During the month, those who were temporarily not working, decreased to 2,300 persons from a total of 102,000 persons against the previous month (July: 104,300 persons).

“This group of persons, who were most likely not able to work, were not categorised as unemployed as they had work to return to.

“The decline in the total number of employed persons who were temporarily not working, among others, was due to the positive effect of the resumption in almost all economic activities,” it said.

Meanwhile, in terms of age group, the unemployment rate for youth aged 15 to 24 slipped 0.2% to 13.7% (July: 13.9%), while the unemployment rate for youth aged 15 to 30 fell 0.8% to 8.9% (July: 9.7%).

The number of labour force increased by 76,600 individuals to 15.9 million persons in August compared to the month prior. During the month, the labour force participation rate (LFPR) improved 0.3% to 68.4% (July: 68.1%).

On a yearly basis, the number of labour force rose to 189,100 individuals from 15.71 million persons in August last year.

“In August 2020, male LFPR increased 0.2 percentage point to 80.6% compared to July 2020 (80.4%). The number of male labour force increased by 1% to 9.72 million persons.

“On the other hand, female LFPR rose by 0.1 percentage point to 55.2% (July 2020: 55.1%) with the number of female labour force being 6.18 million persons. Meanwhile, YoY, male and female LFPR dropped by 0.3 percentage point and 0.4 percentage point respectively,” it said.

Moving forward, the department said some challenges will hinder the labour market recovery in the upcoming months following the rising cases of Covid-19 infections in the country which could impact the potential of the labour force to enter the labour market.

The multiple initiatives by the government, such as the short-term National Economic Recovery Plan or Penjana and the Global Online Workforce Programme or GLOW, are expected to cushion the impact from unprecedented events and consequently retain jobs, it said.