Bimb Research Highlights

Economic - Labor Market Remained Robust

Publish date: Tue, 09 Apr 2024, 05:27 PM
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Bimb Research Highlights
  • Consistent growth in both labor force and employment
  • The number of unemployed persons continued to decline
  • Unemployment rate maintained at 3.3%
  • Participation rate remained steady at its record high of 70.2%
  • Varied unemployment rate across advanced economies
  • Labor market in Malaysia is anticipated to improve further


Malaysia’s labor force continued its strong performance in February 2024, supported by an improved economic and business outlook. The labor force in February 2024 experienced further improvement, growing by 0.1% MoM to 17.07mn persons. The number of employed persons continued to rise, increasing by 0.2% MoM reaching a record of 16.51mn persons. Meanwhile, the number of unemployed persons continued their downward trend, with a marginal drop of 0.1% to 567.0 thousand persons. The unemployment rate remained constant for the fourth straight month in February at 3.3% (Jan: 3.3%), maintaining its lowest since January 2020. The labor force participation rate remained stable at 70.2%.

Malaysia’s labor market conditions stayed stable in February, showing a greater capacity to create jobs. This aligns with the ongoing improvement in the national economic situation and is in line with the global economic expansion.

In February 2024, the number of employed persons continued in an upward trend, with a rise of 0.2% MoM (+24.9k persons) to register 16.51mn persons (Jan: 16.48mn). Year-on-year, the number of employed persons increased by 2.0% (+318.6k persons) compared to the same month in the previous year (Feb’23: 16.19mn persons).

During the month, the employment-to-population ratio, which indicates the ability of an economy to create employment, maintained at 67.9% (Jan: 67.9%). Comparatively, this ratio posted 0.5 percentage points growth from 67.4% in February 2023.

Across various economic sectors, the Services sector saw a continued increase in employed persons, especially in Wholesale & retail trade, Food & beverage services, and Transportation & storage activities. Similarly, the Manufacturing, Construction, Mining & quarrying, and Agriculture sectors also experienced a rise in employed persons in February 2024.

By employment status, most of the employment were from the formal sector (employees: 75.2%, employers: 3.6%), against informal sector (proxied by ownaccount workers) that constituted 18.3% of total recruitment in February. The

remaining 3.0% were unpaid family workers. Employment in the employees' category increased slightly by 0.1% MoM to 12.41mn persons (Jan: 12.39mn persons). Similarly, own account workers sustained its growth expansion and increased 0.3% MoM to 3.02mn persons (Jan: 3.01mn persons).

Meanwhile, the number of unemployed persons declined further, with a marginal drop of 0.1% MoM to 567.0k thousand persons (Jan: 567.3k persons). February’s unemployment rate remained at 3.3% as registered in the previous month. On an annual basis, the number of unemployed persons declined by 4.2% (-24.9k persons) compared to 591.9k persons in February 2023. Accordingly, the unemployment rate dropped by 0.2 percentage points from 3.5% in February last year.

The youth unemployment rate (aged 15-24) remained at 10.6% for four consecutive months, recording the number of unemployed youths at 306.6k persons (Jan: 10.6%; 306.8k persons), while the unemployed rate for those aged between 15-30 years reduced to 6.6% with 434.8k unemployed youths (Jan: 6.7%; 439.7k persons). In terms of the unemployment category, 79.8% were actively unemployed, meaning they were available for work and actively seeking jobs. This category dropped by 0.04% to record 452.4k persons (Jan: 452.5k persons).

The labor force in February 2024 saw further improvement, rising by 0.1% MoM to 17.07mn persons (Jan: 17.05mn persons). The labor force participation rate (LFPR) remained steady at 70.2%, as in the preceding month. Compared with the same month of the previous year, the number of labor force enhanced by 1.8% YoY or equivalent to 293.7k persons (Feb’23: 16.78mn persons). Therefore, the LFPR was higher by 0.3 percentage points from 69.9% in February 2023.

The number of persons outside the labor force posted a slight decline of 0.01% MoM to 7.23mn persons (Jan: 7.23mn persons). On an annual basis, the number of outside labor force fell by 0.1% from 7.24mn persons in February last year. The major composition of those outside the labor force was housework/ family responsibilities, accounting for 42.5%, while schooling/training ranked second with 41.0%.

Varied unemployment rate across advanced economies

US jobless rate was moderated to 3.8% in March 2024. Meanwhile, according to ADP payroll data, the US private sector employment grew 184k in March (Feb: 155k). On the other hand, the Job Openings and Labor Turnover Survey (JOLTS) continued to show labor demand and supply in the US coming into a better balance with job openings rising slightly in February to 8.76mn from 8.75mn (revised) reading in the prior month. The Eurozone’s unemployment rate remained stable at 6.5% in February. Japan’s unemployment rate stood at 2.6% in February 2024, rose slightly from the previous month.


Malaysia's unemployment rate held steady at 3.3% in February, maintaining its lowest since January 2020. The labor force participation rate remained at a record high of 70.2%, with the total labor force slightly surpassing the total working population. We anticipate the labor market to stay stable throughout 2024, given the ongoing employment growth observed in recent months. Anticipating stable hiring due to economic expansion, manufacturing recovery, increased investments, infrastructure spending, and improving tourism. The situation is expected to drive higher employment demand, crucial for sustaining

economic stability. We maintain our stance that the unemployment rate will remain stable at 3.3% this year, representing a technically full employment level.

The downside risks to domestic labor market among others include geopolitical tensions, slower external trade recovery, and cautious business sentiment due to domestic policy reforms.

Source: BIMB Securities Research - 9 Apr 2024

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