Malaysia nears “full employment” as job market stays strong in 2024

Malaysia’s labour market is anticipated to maintain stability, hovering around “technically full employment” as the country’s unemployment rate held steady at 3.3% in February 2024.

Citing various factors contributing to this stability, the Global Economics and Market Research by UOB highlighted the increased realisation of committed investments, sustained infrastructure spending, a resurgence in tourism activities, recovering trade dynamics, and the implementation of catalytic projects outlined in national master plans.

“While downside risks remain, they have yet to pose any material change to the labour market outlook at this juncture,” it said, underlining the importance of external factors such as geopolitical tensions and stringent financial conditions, as well as internal risks stemming from domestic policy reforms like tax adjustments and subsidy rationalisation.

UOB maintained its projection for Malaysia’s unemployment rate at the end of 2024 at 3.3%, in line with estimates from Bank Negara Malaysia (BNM) and consistent with previous forecasts for the end of 2023.

February’s labour market data continued to demonstrate positive trends, marked by record-high levels of both the labour force and employment. The national unemployment rate remained stable at 3.3% for the fourth consecutive month.

“The high employment-to-population ratio also points to high ability of creating jobs with the labour force participation rate holding at a record level of 70.2%,” it said.

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Across major economic sectors, hiring showed sustained growth, particularly in the services sector encompassing wholesale and retail trade, food and beverages services, as well as transport and storage activities.

“Most job opportunities were in the formal sector, with 75.2% of workers employed as employees and 3.6% as employers,” the bank added. The informal sector, predominantly comprising own-account employees, represented only 18.3% of total recruitment, while unpaid family employees constituted the remaining 3%, reported New Straits Times.