● The unemployment rate edged up to 3.3% in February (Jan: 3.2%)

- Unemployed persons (2.6% MoM; Jan: -1.0%): steepest increase in 43 month, bringing the total unemployed persons to 525.2k (Jan: 511.7k), reflecting hampered business activities amid the COVID-19 pandemic.

● Labour force growth (0.3% MoM; Jan: 0.2%) exceeded employment growth (0.2%; Jan: 0.2%)

- Labour force: 15.87m persons (Jan: 15.83m).

- New jobs creation: eased to a two-month low (26.9k; Jan: 31.6k).

- Manufacturing sector: employment declined (-0.1% MoM; Jan: 1.7%), with payroll retaining a contraction, albeit smaller (-0.7%; Jan: -2.1%).

● Labour force participation decreased to a four-month low (68.7%; Jan: 68.9%)

- Due to higher growth of those outside the labour force (1.3% MoM; Jan: -0.01%), signalling increased number of discouraged job seekers, amid the dismal economic outlook.

- Job vacancies rose after two months of contraction (4.1%; Dec: -16.4%), reaching 64.9k in January, predominantly comprised of low-skilled jobs (share: 63.9%; Dec: 73.8%).

● Weak labour market condition globally

- US: soared to a 31-month high of 4.4% in March (Feb: 3.5%), with increasing number of people being laid off due to business shutdowns as the country’s COVID-19 situation worsened.

- TH: decreased marginally (1.0%; Feb: 1.1%), but the tourism-dependent economy is expected to endure further downturn in the labour market as the health crisis halts tourism activities.

● 2020 unemployment rate forecastretained at 4.1% (2019: 3.3%), reflecting a deterioration in economic environment (GDP: - 1.9%; 2019: 4.3%)

- Unemployment rate to increase sharply in the months ahead, as a repercussion of disrupted business activities due to the tightened movement restrictions and hampered demand conditions, domestically and externally.

- Nonetheless, we expect the government measures, such as wage subsidy scheme and special grant for micro enterprises, to slightly soften the uptrend in unemployment rate.

Source: Kenanga Research - 15 Apr 2020