Unemployment rate highest since ‘93

The labour market was being challenged by the rising numbers of new individuals entering the market amid an unstable economy


MALAYSIA’S unemployment rate rose 4.5% last year, the highest rate recorded since 1993, according to the Department of Statistics Malaysia (DoSM).

The number of unemployed individuals in December 2020 also rose for the annual comparison, rising 1.6% to 772,900 individuals or at a rate of 4.8% in December. The unemployment rate also rose 0.1 percentage point in the fourth quarter last year (4Q20) to 4.8% or 760,700 individuals.

DoSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in 2020, the labour market was being challenged by the rising numbers of new individuals entering the market amid an unstable economy.

“The labour market condition in December 2020 was still influenced by the health crisis and economic consequences and has caused slower recovery momentum in the labour market.

“Thus, during the month, the labour market remained competitive as the number of labour force increased by 27,800 persons to 15.99 million persons.

“The labour force participation rate (LFPR) remained at 68% for December 2020, while the number of persons outside the labour force registered a decrease of 2,600 persons to 7.37 million persons compared to November 2020 with the largest composition attributed to schooling and training,” he said in a statement yesterday.

Mohd Uzir added that in 4Q20, there were 533,700 individuals who worked less than 30 hours per week due to less productive working conditions or insufficient work.

“Out of the total number of employees, 369,100 persons were categorised as time-related underemployment since they worked less than 30 hours a week and were able and willing to work extra hours.

“They comprised 2.4% of the overall employment in the 4Q20. In the meantime, skill-related underemployment, which comprises those with tertiary education but working in semi-skilled and low-skilled occupations, accounted for 1.89 million persons or 37.4% of the total of employed persons with tertiary education,” he said.

He said based on the quarterly data, the LFPR has edged down by 0.3 percentage points to 68.4% throughout 2020, while the number of employed individuals decreased by 0.2% to 15.1 million.

“The marginal decrease was due to uncertainty in the labour market following health and economic crisis during the year.

“As the country experienced a slower labour demand in 2020 due to the adverse impact of the pandemic, unemployed persons recorded an increase of more than 200,000 persons.

“The health crisis has given a huge impact to the labour force which led to the unemployment rate reaching above 4% against an average of 3% recorded in the pre-crisis period,” he said.

In a separate statement, DoSM said Malaysia’s manufacturing sales rose 4.5% to RM124.6 billion in December 2020 on an annual comparison, the highest growth since March 2020.

The rise in sales value was driven by the increase in transport equipment and other manufacturing products (20.5%), food, beverage and tobacco products (7.9%), and electrical and electronics (E&E) products (4.2%).

“Total employees engaged in the manufacturing sector in December 2020 was 2.2 million persons, a decrease of 2% compared to 2.24 million persons in December 2019.

“Salaries and wages paid amounted to RM7.77 billion, a drop of 0.8% or RM59.7 million in December 2020 compared to the same month in 2019.

“The sales value per employee rose 6.7% to RM56,644 compared to December 2019. Meanwhile, the average salaries and wages per employee was RM3,533,” it said.

For 4Q20, sales value of the manufacturing sector rose 3% to RM366.4 billion compared to the similar quarter in 2019.

DoSM said the increase was also driven by the transport equipment and other manufactured products (15%), the food, beverages and tobacco products (9%), and E&E products (4.3%).

Read our previous report here

Malaysia’s unemployment rate reached 27-year high