The labour market situation continued to recover in Jan. Employment growth gained momentum (+0.2% MoM; Dec: +0.1% MoM), underpinned by higher employment across all sectors. The labour force also expanded at a faster pace (+0.2% MoM; Dec: +0.1% MoM), while the number of unemployed persons continued to decline (-0.6% MoM; Dec: -0.2% MoM). The unemployment rate stood unchanged at 3.6% (Dec: 3.6%).

DATA HIGHLIGHTS

The labour market situation continued to recover in Jan, in tandem with the growing socio-economic activities and revival of the tourism sector. The number of unemployed persons declined at a faster pace on a MoM basis (-0.6%; Dec: -0.2%), but at a slightly slower pace on a YoY basis (-12.4%; Dec: -12.8%). The unemployment rate stood unchanged at 3.6% (Dec: 3.6%).  

In terms of unemployment duration, the share of unemployed for more than 1 year (6.4%; Dec: 6.2%) inched higher, while the share without a job for duration of less than 3 months (60.8%; Dec: 60.9%) and for 6 to less than 12 months (11.2%; Dec: 11.5%) declined. Meanwhile, the share of unemployed for durations of 3 to less than 6 months was unchanged (21.5%; Dec: 21.5%).  

Employment growth gained momentum on a MoM (+0.2%: Dec: +0.1%) but moderated on a YoY basis (+3.0%; Dec: +3.1%). Growth continued to be supported by upward employment in the services sector, particularly in wholesale & retail trade, food & beverage services, as well as administrative & support service activities. Similarly, an uptrend in employment was also observed in the other sectors; manufacturing, construction, mining, and agriculture. In terms of employment status, growth of employees continued at a steady pace (+0.1% MoM; Dec: +0.1% MoM), while growth of own account workers accelerated (+0.6% MoM; Dec: +0.4% MoM). Meanwhile, the number of employed persons who were temporarily not working declined to 81.3k persons (Dec: 91.6k persons).  

Labour force expansion continued at a faster pace on a MoM basis (+0.2%; Dec: +0.1%) and remained steady on a YoY basis (+2.4%; Dec: +2.4%) amid the robust business activities. Following this, the labour force participation rate remained steady at 69.8% (Dec: 69.8%).  

Separately, SOCSO reported a decrease in loss of employment (LOE) in Feb (3.1k; Jan: 4.0k) concentrated mostly in the manufacturing, wholesale & retail, as well as professional & technical industries. Selangor (29.9%) and KL (24.7%) remained the two states with the highest LOE concentration.

HLIB’s VIEW

Malaysia’s labour market has shown strong recovery following the reopening of the economy, benefitting from the revival of social and business activities. Nevertheless, despite the optimism stemming from China’s reopening impact on Malaysia’s tourism and growth, we expect Malaysia’s labour market to continue on its recovery path at a more moderate pace due to the expected slowdown in domestic economic activity and persistent downside risks on the external front.

Source: Hong Leong Investment Bank Research - 10 Mar 2023