Data Highlights

• The labour market continued its positive momentum, showing a consistent increase in employment nationwide. In July 2024, employment grew by 1.8% YoY and 0.2% MoM, bringing the total workforce to 16.63mn individuals.

• By economic sector, the number of employed persons in the Services sector continued to increase, largely in Food & beverage services; Wholesale & retail trade; and Transformation & storage activities. Likewise, the Manufacturing, Construction, Mining & quarrying and Agriculture sectors also registered growth in the number of employments.

• In the meantime, the number of unemployed persons continued to decline, decreasing by 2.7% YoY to 563.7k individuals (Jun24: 565.3k persons), gradually approaching the pre-pandemic levels of 519k in 2019. On a monthly basis, the number of unemployed people decreased by 0.1%. During the month, the jobless rate stood at 3.3%, the same rate seen in the previous month.

• The labour force (encompassing both employed and unemployed individuals) saw a MoM expansion of 0.1% or a YoY growth of 1.7%, reaching a total of 17.19mn individuals. The labour force participation rate stood at 70.4%.

• Meanwhile, the number of individuals outside the labour force remained relatively stable on an annual basis, where there was a minimal MoM decline of 0.01%, totaling 7.23mn persons. Among those outside the labour force, 42.8% cited housework and family responsibilities as their primary reason for not participating in the labour market, followed closely by schooling and training at 41.4%.

• Our thoughts: Malaysia's economic landscape continues to grow, bolstered by robust household spending, a sustained recovery in the labour market, stronger policy support, increasing exports, rising tourist arrivals, and a significant expansion in investment activities. These positive developments in economic and business activities are expected to create more job opportunities and drive income growth, further encouraging labour force participation. As a result, Malaysia's labour market is anticipated to remain competitive and stable in the coming months, closely aligned with the country's broader economic performance. The ongoing momentum in key sectors, alongside government initiatives, will likely reinforce labour market resilience and support steady wage growth, maintaining consumer confidence and overall economic stability.

• Consequently, the country’s labour market is expected to maintain a stable growth trajectory, supported by a solid economic position, increasing tourist arrivals, and growth across all sectors. Our projections suggest a potential decrease in the unemployment rate to 3.2% by year-end. Additionally, the labour force and employment figures are expected to rise by 1.7% and 2.0%, respectively, while unemployment is forecasted to decline by 5.2% over the year.

Source: TA Research - 10 Sept 2024