October 2021’s Unemployment Rate Lowest in 18 Months

According to the Department of Statistics's Statistics of Labour Force report, Malaysia has the lowest unemployment rate this year, with only 4.3% in October, the lowest percentage since April 2020.

 

Continuation of economic activities

Malaysia's chief statistician, Datuk Seri Dr Mohd Uzir Mahidin said the labour force situation remained stable in October 2021 due to the continuing economic and social recreation activities.

In October 2021, most states had progressed to Phase 4 of the National Recovery Plan, with an overall growing vaccination rate and a decrease in the number of daily Covid-19 cases.

He stated that "these good headways have led further resumption of economic operations, including the legalisation of interstate travel."

More domestic tourism sites are now open to fully-vaccinated individuals, which has resulted in an increase in travel and domestic tourism activities during the month.

 

The unemployment rate so far

The employment rate grew by 0.6% month over month (MoM) to 15.55 million people in October 2021 (September 2021: 15.46 million people), with the employment-to-population ratio climbing by 0.3 to a new high of 65.8 (September 2021: 65.5%).

Unemployment fell by 3.4% in October to 705,000 people, down from 729,600 in September 2021.

Although the number of unemployed people is decreasing, it is still larger than it was before the pandemic. Unemployment fell to 4.3% in October 2021, the lowest level since April 2020 (September 2021: 4.5%; April 2020: 5%; March 2020: 3.9%).

In October 2021, the labour force expanded by 0.4% to 16.26 million individuals, up from 16.19 million in the previous month, with the labour force participation rate increasing by 0.2% points to 68.8% (September 2021: 68.6%).

Manufacturing and construction employment remained positive for the third month, while agriculture and mining and quarrying employment continued to decline.

Employees accounted for 77% of the total employed persons in October 2021, resulting in a 0.4% increase in overall employment of 11.97 million people.

The own-account workers category, which mostly consists of workers who make money on a daily basis as small business owners and smallholders, has risen by 1.4% to 2.61 million.

The number of outside labour force has decreased by 0.6% to 7.36 million, with schooling/training accounting for 42.6% of the total outside labour force, followed by housework/family responsibilities category with 40.7%.

 

Recovery progress ahead

Mohd Uzir also thought that the liberalisation of interstate travel will have a good impact on domestic tourism-related industries such as arts, transportation, entertainment, and recreational activities, allowing them to restore business momentum.

According to the Global Economics and Market Research report from United Overseas Bank Ltd, Malaysia's labour market maintained its recovery momentum in October, with record improvements across all metrics.

"Despite the possibility that the emergence of the new Omicron variant will throw a wrench in the nation's economic recovery," we believe that continued government policy support, positive vaccination progress, and extra precautionary measures to help prevent the spread of new virus variants will be able to sustain the labour market recovery going into 2022," the report said.

Following significant economic re-opening across the country, business confidence has improved, with the Malaysian Employers Federation's Salary Survey estimating over 4% rises in average salaries and greater incentive pay-outs for executives and non-executives in 2022.

"We maintain our year-end unemployment rate forecasts of 4.2% for 2021 (2020: 4.8%; 2019: 3.3%) and 3.6% for 2022," Julia Goh and Loke Siew Ting said in the study.

 

Source: The Malaysian Reserve

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