KUALA LUMPUR, July 14 — The country’s unemployment rate rose to its highest point this year to reach 5.3 per cent in May, with the number of jobless Malaysians also reaching a high of 826,100 that month, the latest official statistics has shown.
In the Department of Statistics Malaysia’s (DOSM) release of the May 2020 unemployment figures, the situation had further worsened since joblessness reached 5.0 per cent in April.
The unemployment rate measures the percentage of the unemployed population in the labour force, with the labour force being those aged 15 to 64 and are either employed or unemployed.
DOSM figures also showed the number of unemployed persons growing from 610,500 in March (which was the month the movement control order period first started) to 778,800 in April which was an increase of 168,300 persons, before going up by 47,300 persons to 826,100 persons in May.
Compared year on year to May 2019’s 519,800 unemployed persons, the number of unemployed persons in May 2020 grew by a whopping 306,300 persons.
Noting the smaller growth in actual numbers of unemployed persons in Malaysia between the months of April and May (an increase by 47,300) and between the earlier months of March and April (a bigger increase by 168,300), Malaysia’s chief statistician Datuk Seri Mohd Uzir Mahidin suggested that the government’s economic stimulus packages could have contributed to the lower growth in May 2020.
“The reduction could partly be due to the implementation of numerous stimulus packages reaching its intended target in addition to more businesses were allowed to operate following the conditional movement control order (CMCO) during the month,” he said in a statement today, referring to the May 2020 figures.
Malaysia first implemented the MCO on March 18 in response to the Covid-19 pandemic, with non-essential businesses ordered to temporarily close, and entered into the conditional movement control order (CMCO) phase on May 4, where most businesses were allowed to reopen.
Malaysia is now in the recovery movement control order (RMCO) phase until August 31.
How May unemployment figures compare to the past decades
When compared to almost four decades of past yearly unemployment figures in Malaysia, the unemployment rate of 5.3 per cent in May 2020 neared the figures about 30 years ago of 5.6 per cent and 5.7 per cent in the years of 1985 and 1989. The national high since unemployment figures were made available in 1982 is 7.4 per cent in 1986.
In terms of actual numbers, the May 2020 figures of 826,100 unemployed persons easily surpass all of the previous yearly figures since 1982.
Other employment statistics for May
As a whole, the size of the labour force in Malaysia grew in May to 15.71 million persons, which is up marginally by 1,800 persons when compared to April, and up by 71,700 persons when compared year-on-year to May 2019.
Among other things, the DOSM figures released today showed that the number of employed persons who were temporarily not working had fallen from 4.87 million in April to 2.27 million in May. The DOSM said it had not categorised this group — who were most likely not able to work from home — as unemployed as they had work to return to.
The number of employed persons in Malaysia’s labour force fell marginally by 0.3 per cent from 14.93 million in April to 14.89 million in May, with the affected sectors in May being the services sector (mainly tourism, accommodation, event planning, arts and entertainment, sports and recreational activities), DOSM said.
“As the health authority increased detection of Covid-19 clusters among foreign workers, noticeable decline was also observed for employed persons in the construction sector,” it said in the statement.
In line with the decline in number of employed persons in Malaysia, DOSM said the employment-to-population ratio — which provides information on the ability of an economy to create employment — dropped further by 0.4 percentage points to post 64.4 per cent.
For own-account workers which typically mean self-employed persons and can include gig workers, DOSM figures showed that their numbers have continued its decline since March, falling from 2.59 million in April to 2.42 million in May.
“Most are daily wage earners working in farmers’ market, night market and stalls; freelancers; as well as smallholders. As the conditional MCO still restricted their business operations to run as usual, this group of workers was and may continue to be at high risk of job and income losses,” Mohd Uzir said.
Outlook for rest of 2020
But as a whole, Malaysia’s chief statistician Mohd Uzir expressed an optimistic view of the country’s labour market conditions in the coming months.
He pointed out that the labour supply conditions had improved considerably when compared to April despite a continuous negative trend up to May, also highlighting that the improved economic indicators in May when compared to April was a signal that the economy was gradually improving.
“It is expected that as the recovery MCO took effect on 10th June onwards, the business conditions would gradually recover as more sectors are allowed to open with strict standard operating procedures. The implementation may allow businesses to regain their momentum, while new business opportunities emerge as demand changes amid the new norm. This in turn is expected to retain employment, create new jobs and spur hiring.
“With this development, in the short term, labour force situation in June is expected to improve slightly, while in the medium term up to the second half of 2020, further progress is deemed possible. Through various initiatives by the government, in addition to new creative business models innovated, the labour market may find its way to a recovery path,” he said in the same statement.