A successful end to the country’s transition to Covid-19 endemicity and continued govt support under the Budget 2023 is key to holding up the existing recovery momentum
by AKMAR ANNUAR / pic TMR FILE
MALAYSIA’S labour market continued to improve albeit moderately in August with the national unemployment rate held steady at 3.7%, according to UOB’s Global Economics & Markets Research.
A successful end to the country’s transition to Covid-19 endemicity and continued government support under the Budget 2023 is key to holding up the existing recovery momentum.
Further in the research, it is shown that the labour force expanded for the 14th straight month, lifting the labour force participation rate to another new record high of 69.7%.
“The gain in total employment was again driven by increased hiring in services (particularly food and beverages services, wholesale and retail trade, and administrative and support service activities), manufacturing, and construction sectors,” the research report reads.
However, in the agriculture and mining and quarrying sectors, the headcounts continued to be trimmed.
The employment-to-population ratio, which indicates the ability of an economy to create employment, surpassed pre-pandemic high level for four months in a row at 67.1%.
Despite a sustained downward trend, total unemployment remained higher than the pre-pandemic level.
The actively unemployed accounted for 82.9% of the total job losses while inactively unemployment made up 17.1% making it the highest rate since September 2020.
In the meantime, the youth unemployment rate maintained at 12.1%.
In the research, the worker segment that is temporarily not working but had jobs to return to post a persistent fall of 2,400 or 2.9% m/m to 81.3k.
The number of people outside the labour force continued to see a decline of 5,900 to 7.24 million marking the smallest amount since March 2020.
The major composition of the outside labour force was housework or family responsibilities with a share of 42.9% while the category of schooling or training ranked second with a share of 40.4%.
The International Monetary Fund calculated that about one-third of the world economy will have at least two consecutive quarters of contraction this year and next.
Singapore’s Health Minister Ong Ye Kung yesterday warned of a possible new wave of local Covid-19 infections as Singapore’s reinfection rate rose to as high as 15%, suggesting potential importation risks of infections to Malaysia in the near term given the full reopening of its borders since April 1, 2022.
To counter these hazards, the success of Budget 2023 after the general elections are key to holding up the existing labour market recovery momentum.
Health Minister Khairy Jamaluddin said in September 2020 that Malaysia could end its transition to Covid-19 endemicity by the end of the year and that a voluntary annual vaccination programme may be introduced.
The initial Budget 2023 proposal spelt out job-related measures worth at least RM95 million.
They include a continuation of the hiring incentive through the Social Security Organisation (Socso), which is worth RM150, whereby an amount of RM600 to RM750 per month will be paid for three months to the employer who replaces foreign workers with local workers.
Another incentive is mobility assistance of RM500 by Socso to those who secure employment outside of their state of residence.
Also, there will be a continuation of Malaysia Short-term Employment Programmes (MySTEP) with 50,000 career opportunities on a contract basis and the government will increase the MySTEP salary rate by RM100 to between RM1,500 and RM2,100.
HRD Corp allocated RM750 million to provide skills training to more than 800,000 workers.
The Securities Commission Malaysia, in collaboration with the Capital Market Development Fund, will implement the Capital Market Graduate Programme involving a fund of RM30 million to enhance the employability of 9,000 graduates for careers in the capital market.
An allocation of RM20 million for Program Usahawan Siswazah will enable 1,000 graduates to venture into entrepreneurship.
With all these initiatives, the research said it is hopeful for the nation to keep the view of a potential full labour market recovery back to pre-pandemic levels by mid-2023 for now.