KUALA LUMPUR: Malaysia's stable employment landscape is expected to provide continued support to private consumption, backed by sustained wage growth in both the services and manufacturing sectors. 

According to Hong Leong Investment Bank Bhd (HLIB), Malaysia's labour market situation further strengthened in May on the back of increased tourism activity, improvements in the manufacturing sector, and better trade performances. 

The bank said the number of unemployed persons continued to decline on both a month-on-month (MoM) basis to 0.05 per cent from 0.04 per cent in April and a year-on-year (YoY) basis to 3.2 per cent from 3.5 per cent in April. 

"Following this, the unemployment rate held steady at 3.3 per cent," it said. 

Meanwhile, HLIB said the labour force recorded steady expansion on both a MoM (0.1 per cent; April: 0.1 per cent) and YoY basis (1.7 per cent; April: 1.7 per cent) amid an encouraging economic background. 

Following this, it said the labour force participation rate stood unchanged at 70.3 per cent.

Separately, HLIB said SOCSO reported a decrease in loss of employment (LOE) in June to 3,500 from 4,900 in May, concentrated mostly in the manufacturing, wholesale & retail trade, and transportation & storage industries. 

Selangor (22.6 per cent) and Kuala Lumpur (22.0 per cent) remained the two states with the highest LOE concentration. 

Overall, HLIB said there was sustained wage growth in both the services (3.3 per cent YoY) and manufacturing sectors (2.9 per cent YoY), albeit at a slower pace. 

The bank said the withdrawals from Employees Provident Fund (EPF) Account 3 and salary increments for civil servants in December are also expected to help buoy consumption momentum. 

Nevertheless, consumers might be more cautious about their spending plans going forward, awaiting further fuel subsidy reforms, it added. 

https://www.nst.com.my/business/economy/2024/07/1075434/stable-employment-support-private-consumption-hlib-research