Labour market remains challenging


MALAYSIA’S labour force condition recovered modestly in January 2021 with a slight increase in unemployment rate at 4.9%, according to the Department of Statistics Malaysia (DoSM).

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin (picture) said entering the year 2021, the labour market remained in a challenging situation following the rising number of Covid-19 new cases, followed by the Movement Control Order (MCO) 2.0 that was imposed on Jan 13 in most states and was extended to Feb 4.

Only five essential economic sectors were allowed to operate during this phase, whereas interstate and interdistrict travel activities were restricted — which led to an uneven recovery momentum of the businesses and consequently, the labour market.

“Thus, the labour force condition recovered modestly in January 2021 reflected by the increase in the number of labour force during the month. The rise in employed persons was much higher than those who were unemployed, signalling some improvement in the labour demand by businesses.

“Labour force in January went up by 0.2% with an additional 31,500 persons to record 16.02 million persons. Slight increase in labour force participation was observed during the month with a rate of 68.5%,” he said in a statement yesterday.

The unemployment rate in January increased slightly to 4.9% from 4.8% in December 2020, ascended by 9,700 unemployed persons to 782,500 persons.

The continuous increase was partly due to review of business strategies in tourism-related industries which consist of accommodation and food services, passenger transportation, entertainment and recreational activities.

“During MCO 2.0, only essential economic sectors which include manufacturing, construction, services, distributive trade, as well as plantations and commodities were allowed to operate.

“Meanwhile, 30% of the employees in the management group were allowed to be in the office, whereas support group employees were subject to the necessities. This situation had caused the employed persons to increase with an addition of 21,900 persons to 15.24 million persons in January 2021,” noted Mohd Uzir.

He said the employment-to-population ratio which indicates the ability of an economy to create employment rose to 65.2% from 65.1% in December.

Commenting further on the status of employment, the chief statistician said employee’s category which encompassed 77.7% of employed persons, enlarged by 0.3% or 40,800 persons to 11.85 million persons.

In the meantime, own-account workers comprising 15.7% continued to decrease for four consecutive months to 2.39 million persons in January.

This group consisted mostly of daily income earners working as small business operators such as small retailers, hawkers, sellers in markets and stalls as well as smallholders.

The number of employed persons who were temporarily not working continued to increase in January 2021 to 158,900 persons from 146,200 persons in the previous month.

This group who were most likely not able to work was not categorised as unemployed as they had work to return to.

Outside labour force continued to decline for the second month, with a decrease of 6,000 persons to 7.37 million persons in January.

Concluding the overall labour force situation, Mohd Uzir said looking at the health crisis situation, the labour market is expected to face a little bumpy road in the first quarter.

Nevertheless, as the first phase of vaccination programme was started on Feb 24, this effort seemed to give some positive insight of the health crisis situation in Malaysia.

“Furthermore, with the various initiatives under the short-term National Economic Recovery Plan, Prihatin and Permai Assistance Package may support the survival of businesses and enhance the labour force situation.

“With these efforts, the uncertainties in the labour market will possibly be alleviated and subsequently the recovery momentum of the labour market may be accelerated,” he added.

Read our previous report here

Unemployment rose slightly to 782,500 persons in January