KUALA LUMPUR (Sept 9): The Malaysian job market is expected to remain strong through the rest of 2024, with companies continuing to hire in line with ongoing economic expansion, according to economists.

In July, the labour force grew by 0.1% to 17.2 million from 17.17 million in June, as reported by the Department of Statistics Malaysia on Monday. The number of employed persons increased by 0.2% month-on-month, rising to 16.63 million from 16.61 million in June.

Meanwhile, the number of unemployed persons slipped 0.3% to 563,700 from 565,300 in June, with the unemployment rate remaining steady at 3.3%.

"Following more encouraging growth in 2024, we anticipate that firms will continue to increase labour demand," said MIDF Research in a note, adding that the increased employment of foreign labour will also contribute to this growth.

MIDF noted that as more people find jobs, a healthy labour market is likely to boost domestic spending and aid in the recovery of external trade.

MIDF maintains its forecast that Malaysia’s unemployment rate will average 3.3% in 2024. However, it warned of potential downside risks, including weaknesses in external trade and global supply chain disruptions, possibly due to weak demand from major trading partners or escalating geopolitical conflicts.

"Declines in global commodity prices and growing concerns over demand could also impact hiring and investment plans in resource-based industries," it added.

Likewise, Kenanga Research expects hiring activity to remain strong for the rest of the year, driven by stable employment growth and more individuals re-entering the labour market for better opportunities.

While it revised its average unemployment rate forecast for 2024 to 3.3% from 3.2%, versus 2023's 3.4% print, it said its projection aligns with continued growth in the services sector, supported by increased tourist arrivals.

"Additionally, the manufacturing sector is set for further recovery, backed by a technology upcycle and continued demand from key trading partners," it said. 

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