• Unemployment rate was stable at 3.3%

• The number of unemployed persons decreased 0.4% yoy to 510,000

• Employment jumped 2.6% to 14,803,000; highest ever recorded

• Labor force expanded by 2.5% to 15,313,000

• Labor force participation rate remained at 68.2% for fourth consecutive month

• Robust exports and industrial production in April lead to a healthy labor market

Employment jumped by 2.6% yoy to 14.80m in April after being stagnant at 2.2% in the previous two months. It was the highest growth ever recorded. Similarly, the labor force expanded by 2.5% yoy in April from a steady growth of 2.1% for third consecutive months. Jobs added in the labor market registered at 70.6k, outstandingly higher than 11k posted in the preceding month. Meanwhile, the number of unemployed person continued to decline by 0.4% to 510,000 in April, same as the previous month’s figure. The labor force participation rate in April 2018 remained at 68.2% and marked the fourth consecutive months of similar rate. However, the unemployment rate for April remained steady at 3.3% yoy for three months in row.

Robust exports and industrial production in April lead to a healthy labor market

Employment reached an all-time high growth in April, expanding by 2.6% yoy after increasing at 2.2% for two consecutive months. Moreover, the number of employed person was at the highest level and breached 14.8m. The unemployment rate stayed at 3.3% and still considered as full employment.

The robust labor market performance was partly underpinned by the stronger external trade in April. Exports surged by 14.0% yoy in April to RM84.2bn after posting a 2.2% increase in a month before. Stronger exports in April was mainly supported by manufacturing sector specifically by export-oriented industries. The job creation would likely to increase as the industry demand more labor force for the production process. Sturdy labor market could also be translated through the higher growth in industrial production. The IPI growth in April picked up to 4.6% from 3.1% in March whilst the total employees engaged in the manufacturing sector increased by 2.1% to 1,069,410. Moving forward, we believe that the solid growth in exports as well as industrial production could result into a healthy employment specifically in the manufacturing sector.

Source: BIMB Securities Research - 13 Jun 2018