The labour market situation continued to improve in Nov. Employment recorded steady expansion (+0.2% MoM; Oct: +0.2% MoM), driven by an uptick in employment across all sectors. The labour force also grew at a steady pace (+0.2% MoM; Oct: +0.2% MoM), while unemployed persons continued to decline (-0.2% MoM; Oct: -0.5% MoM), albeit at a slower pace. Consequently, the unemployment rate held steady at 3.6% (Oct: 3.6%).

DATA HIGHLIGHTS

The labour market situation continued to improve in Nov, amid the nation’s continuously growing economic and social activities, coupled with the rising tourist arrivals, especially heading towards the year-end. The number of unemployed persons continued to decline on both a MoM (-0.2%; Oct: -0.5%) and YoY basis (-13.5%; Oct: -14.6%), albeit at a slower pace. Consequently, the unemployment rate held steady at 3.6% (Oct: 3.6%).  

In terms of unemployment duration, the share of unemployed for less than 3 months (60.6%; Oct: 60.5%) inched higher, while the share without a job for longer durations of 3 to less than 6 months (21.6%; Oct: 21.7%) and for more than 1 year (6.2%; Oct: 6.3%) declined. Meanwhile, the share of unemployed for 6 to less than 12 months stood unchanged (11.6%; Oct: 11.6%).  

Employment recorded steady expansion on a MoM (+0.2%; Oct: +0.2%), however, slightly slowed pace on a YoY basis (+3.2%; Oct: +3.4%). Growth continued to be driven by upward employment in the services sector, particularly in wholesale & retail trade, food & beverage services, as well as information & communication activities. Similarly, an uptick in employment was seen in the manufacturing, construction, and agriculture sectors. The mining sector also posted an increase in employment for the first time since Jul 2020. In terms of employment status, employees growth continued at a steady pace (+0.1% MoM; Oct: +0.1% MoM), while own account workers growth picked up (+0.5% MoM; Oct: +0.4% MoM). Meanwhile, the number of employed persons who were temporarily not working declined further to 76.9k persons (Oct: 79.8k persons).  

The labour force registered continued expansion on both a MoM (+0.2%; Oct: +0.2%) and YoY basis (+2.5%; Oct: +2.6%) amid the upbeat momentum in the domestic economy. In line with this, the labour force participation rate inched higher to 69.8% (Oct: 69.7%).  

Separately, SOCSO reported an increase in loss of employment (LOE) in Dec (3.2k; Nov: 2.8k) concentrated mostly in the manufacturing, wholesale & retail, as well as ICT industries. KL (25.9%) and Selangor (24.3%) remained the two states with the highest LOE concentration.

HLIB’s VIEW

The labour market situation is anticipated to further improve in upcoming months, underpinned by domestic demand and the reviving tourism landscape, particularly so following China’s reopening. The government’s latest efforts to ease and expedite the conditions of hiring foreign workers is also expected to help relieve remaining manpower shortages. We maintain our expectation for BNM to increase the OPR by 25bps in the coming Jan meeting.

Source: Hong Leong Investment Bank Research - 11 Jan 2023