KUALA LUMPUR: Malaysia's labour market continued to improve in the second quarter of 2024 (Q2 2024), with the unemployment rate remaining steady at the pre-pandemic 2019 average of 3.3 per cent for the third consecutive quarter.
The country's labour force expanded the most since Q3 2013 by 186,600 (or +1.1 per cent quarter-on-quarter, QoQ), to an all-time high of 17.15 million in Q2 2024, according to UOB Global Economics & Markets Research (UOB Research) in its latest report.
"Overall, the improvement in the labour market was driven by increasing economic activities (particularly tourism and trade activities), the realisation and commencement of approved investment projects, the implementation of initiatives under the national master plans, as well as the government's ongoing job measures, including the Social Security Organisation's (SOCSO) Job Resettlement Programme," it said.
The research firm noted that the advance gross domestic product (GDP) estimates revealed that Malaysia's economy expanded at a more robust pace by 5.8 per cent year-on-year (YoY) in 2Q24 (Q1 2024: +4.2 per cent) while foreign tourist arrivals in Malaysia have risen by 26.7 per cent to 9.48 million in the first five months of this year from 7.48 million in the same period last year.
Based on the report, the youth unemployment rate (aged 15-24) dipped below the 10 per cent level for the first time in 41/2 years to 9.9 per cent (from 10 per cent in Q1 2024).
The number of unemployed persons fell by 3,300, or 0.6 per cent QoQ to 557.800 (Q1 2024: -3,900, or -0.7 per cent QoQ to 561,100), but remained above the quarterly average of 515,400 in the pre-pandemic year of 2019.
The actively unemployed group, who are available to work and actively seeking jobs, dropped across all durations by 2,200 or 0.5 per cent QoQ to 450,100 (Q1 2024: -8,600 or -1.9 per cent QoQ to 452,300) and made up 80.7 per cent of the total unemployment.
The inactively unemployed persons also reduced by 1,100 or 1.0 per cent QoQ to 107,700 (Q1 2024: +4,700 or +4.5 per cent QoQ to 108,800), which accounted for 19.3 per cent of total unemployment.
Similarly, total retrenchment declined for the second straight quarter by 1,300, or 9.4 per cent QoQ to 12,300 (Q1 2024: -2,100 or -13.3 per cent QoQ to 13,500).
The fall was mainly contributed by fewer cutbacks in the manufacturing, construction, services, and agriculture, forestry, and fishing sectors, which fully offset higher layoffs in the mining sector, UOB Research said.
"We expect these drivers to remain in place to underpin the labour market outlook in 2H 2024 and into 2025. Taking cues from the seasonally adjusted unemployment rate of 3.2 per cent in June (May: 3.3 per cent) and higher GDP growth for Q2 2024, we tweak our 2024 year-end jobless rate forecast slightly lower to 3.2 per cent (from 3.3 per cent previously, Bank Negara Malaysia estimate: 3.3 per cent, end-2023)," it said.