Unemployment Rate Continues to Increase in January 2021
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In January 2021, the unemployment rate increased to 4.9% compared to 4.8% in December 2020. Despite gains in the manufacturing and services sectors, the pandemic's effects on the tourism and agriculture sectors caused the rate to increase by 0.1%
The Department of Statistics Malaysia (DOSM) stated that the unemployment rate in January rose to 782,500, an increase of 9,700 people from 772,900 in December.
MCO 2.0's effects on the labour market
The chief statistician of DOSM, Datuk Seri Mohd Uzir Mahidin, said the labour market stayed in a challenging position after the rising number of COVID-19 cases that saw the implementation of the travel ban from January 13 to February 4 2021.
Only five essential economic sectors were allowed to operate during the phase, while the government banned interstate and inter-district travel activities. This situation has indirectly led to an uneven recovery momentum of the industries and the labour market. Reflecting on the labour force, Uzir said the increase in employed person exceeded those who were unemployed, which hints at an improvement in the labour demand by businesses.
In January 2021, the labour force increased by 0.2% (31,500 persons) to 16.02 million persons, compared to 15.99 million persons in December 2020. DOSM also observed a slight growth in labour force participation in January 2021 with a rate of 68.5%, compared to 68.4% in December 2020.
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The pandemic has caused many business sectors to close down temporarily.
In a statement, DOSM said that the continuous growth in the unemployment rate was partly due to the review of business strategies in tourism-related sectors such as passenger transportation, accommodation and food services, entertainment and recreational activities.
The number of employed persons in the services sector increased month-on-month, especially in wholesale and retail trade, social work, human health and education activities.
He said the manufacturing sector's employment rate grew for the third month, and the construction sector also saw an increase in the employment rate. But, the mining and quarrying, and agriculture sectors recorded a decline for the seventh month.
Future recovery
Uzir also addressed the overall labour force situation, saying that despite MCO 2.0's implementation, the essential services of five economic sectors were permitted to operate normally with strict standard operating procedures.
This action had enabled some balance between the economic consequences and public health while adapting to the new norm. He expects the labour market to have a bumpy ride in the first quarter because of the health crisis in early 2021.
He stated that the national vaccination programme, which began on February 24, would cast some positive light on the health crisis in Malaysia. He added that the many initiatives under Penjana, Prihatin and Permai aid packages might support the businesses' survival and enhance the labour force situation.
He said that these efforts could alleviate the labour market uncertainties and accelerate the labour market's recovery momentum.
Source: The Star
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