KUALA LUMPUR, Dec 8 — MIDF Amanah Investment Bank Bhd is anticipating the unemployment rate for Malaysia to average at 4.5 per cent in 2021 underpinned by the further recovery of the domestic economy in the last two months of 2021 amid relaxations of containment measures, higher vaccination rates and improvements of the consumer as well as business sentiments.
“As for next year, we predict the jobless rate to trend lower at four per cent mainly supported by stronger domestic spending, continuous pick-up in external trade and commodity-based sectors,” it said in its Economic Review on the October 2021 Labour Market released today.
It said Malaysia’s labour market improved further as the jobless rate fell to 4.2 per cent in October 2021, the lowest since March 2020, contributed by the steady expansion of employment growth of 2.3 per cent year-on-year (y-o-y) while the number of unemployed persons reduced by 5.8 per cent y-o-y, the largest contraction rate in five-month.
The investment bank said the strengthening of the labour market is inline with the reopening of economic activities and relaxations of containment measures which started in late September 2021.
“On top of that, we observed Malaysia’s job vacancy rate has shown steady upward momentum in which reflecting that more jobs are available in the market.
“Looking ahead, we expect the labour market to continue improving underpin by further economic reopening in the fourth quarter calendar year (Q4 2021),” it said.
Meanwhile, it said employment growth in the manufacturing sector was slower than the overall national employment rate.
It said the average manufacturing employment growth for the first nine months of 2021 was 0.5 per cent y-o-y against the national average of 1.4 per cent y-o-y.
By share, it said manufacturing contribution to national employment was at the lowest point at 14.5 per cent for nine-month (9M) 2021 against 15 per cent in 2015.
However, it said the lower employment share by manufacturing could be due to improvement in capital-intensive production methods.
“Moving forward, employment activity in the factory industry to rise steadily albeit firm global demand, higher commodity prices and reopening of domestic-oriented industries,” it said.
On the external front, it said the labour market conditions in many countries also improved as more economic and social activities resumed operations amid the relaxation of the stringent Covid-19 restrictions.
It said the US jobless rate surprisingly dipped to a new pandemic low of 4.2 per cent in November 2021 from 4.6 per cent in October 2021 as the rising wages attracted more workers to return to the workplace.
Likewise, it said the unemployment rate in the Euro area dropped to an 18-month low of 7.3 per cent in October 2021.
It said a similar trend was observed in most of the Asian countries during the month.
Nevertheless, it said the pace of recovery could be disrupted by the resurgence of Covid-19 infections in many countries and the emergence of the Omicron variant. — Bernama