KUALA LUMPUR: Malaysia's labour market is expected to remain pressured in the near term on the back of surging Covid-19 cases and the reimposition of nationwide Movement Control Order (MCO 3.0) from May 12 by full lockdown until June 14.
Kenanga Investment Bank Bhd said the impact is expected to be less severe than the MCO 1.0 as more sectors are allowed to resume operation and continued support from government measures.
This is reflected in the latest data from MyFutureJobs as the number of loss of employment (LOE) eased to 3,724 in May this year compared to 4,963 in April despite surging Covid-19 infections.
The research firm noted that the labour market would be supported by the progress of the vaccination campaign and sustain expansion in the manufacturing sector, particularly the export-related sector back by stronger demand from advanced economies and technology upcycle.
Kenanga's maintains Malaysia's unemployment rate forecast at 4.3 per cent for 2021 compared to 4.5 per cent in 2020.
Malaysia's unemployment rate eased slightly to 4.6 per cent in April compared to 4.7 per cent in March despite a surge in the Covid-19 cases.
Unemployed persons fell for the third straight month, reducing unemployed persons to 742,700 compared to 753.200 in March.
Employment growth expanded for the fifth consecutive month, albeit at a slower pace.
The growth was associated with an upward trend in employed persons in the services, manufacturing and construction sectors.
Labour force sustain expansion to a new record high of 16.09 million persons compared to 16.08 million in March, while new job creation expanded at a slower pace at 22,700 compared to 58,700 in March.
Labour force participation rate unchanged at 68.6 per cent despite an increase in the number of the labour force, Kenanga noted.
The unemployment rate eased in the advanced economies, with the United States unemployment rate eased in May at 5.8 per cent from 6.1 per cent in April, the lowest since March 2020 as employers added 559,000 jobs.
In Australia, the jobless rate eased in April at 5.5 per cent from 5.7 per cent in March, the lowest since March 2020 as the youth unemployment rate improved despite wage subsidies.