Malaysia: Jobless rate held steady at 3.4% in September – UOB

Malaysia’s labour market continued to see gradual improvement with both labour force and employment hitting an all-time high at 16.95mn and 16.38mn respectively in Sep. Both unemployment rate and labour force participation rate also held steady at 3.4% and 70.1% respectively. 

There was a broad-based increase in hiring across economic sectors, led by services particularly wholesale & retail trade, food & beverage services and transportation & storage activities. The employment-to-population ratio maintained at 67.7%, signaling the ability of the Malaysian economy to create employment.  

Nevertheless, with rising external headwinds and uncertainties denting business sentiment and unemployment rate easing at a slower pace than we had initially anticipated over the past few months, we tweak our year-end jobless rate projections slightly higher to 3.3% for both 2023 and 2024 (from 3.2% previously). This will translate into an average of 3.4% for the entire year of 2023 (MOF est: 3.5%. 2022: 3.9%) and 3.3% for 2024 (MOF est: 3.4%). Job related measures announced under Budget 2024 are key drivers of further improvement in the labour market going into 2024, barring any ugly turn in the global outlook.