KUALA LUMPUR, March 8 — MIDF Amanah Investment Bank Bhd expects the weakness in the labour market in the early part of 2021 to be temporary, and the job situation will improve going forward on the back of recovering economic activities.
With the new Covid-19 cases on a declining trend, the labour market would likely recover in the coming months as more restrictions have been gradually eased, allowing more businesses to reopen and resume operations, its research arm said.
Malaysia’s unemployment rate rose to 4.9 per cent in January 2021 against 4.8 per cent in December last year as the labour market weakened due to re-introduction of tighter restrictions or movement control order (MCO) 2.0 in almost all states in the country in order to control the record increase in Covid-19 cases.
On a monthly basis, employment continued to increase by +0.1 per cent month-on-month (m-o-m), while unemployment grew at a faster pace of +1.2 per cent m-o-m as the number of unemployed persons rose by 9,600.
MIDF Research said in a note said that there was a slight decline for the number of people outside the labour force, falling at 0.1 per cent m-o-m in January 2021.
“This indicates that people were more encouraged to look for jobs during the month as the size of the labour force expanded from the previous month and reached 16 million for the first time on record.
“As a result, the larger labour force limited the increase in the jobless rate,” it said.
On vacancies, MIDF said the lower vacancies in December 2020 suggested a slight fall in labour demand after three successive months of increase.
Having said that, job vacancies remained high in December 2020 at 173,500, the highest since end-2011, it said.
“With more businesses reopened in December 2020, there were higher demand for sales and shop workers as sales services recover.
“Despite the demand for labour remaining high in December 2020, the tighter restrictions due to the MCO 2.0 in January and February 2021 will temporarily affect labour demand in the near term.
“However, the situation is expected to improve particularly from March 2021 as restrictions from the movement control have been relaxed,” it added. — Bernama
