PETALING JAYA: Malaysia’s unemployment rate for August stood at 3.4%, dropped 0.1 percentage point compared with the previous month, according to the Department of Statistics. The better performance in the labour market was due to healthy expansions in both labour force and employment by 1.4% year-on-year (y-o-y) accordingly, coupled with a drop in unemployed persons from 519,000 in July to 517,000 in August. MIDF Research expects the unemployment rate to average at 3.3% in 2017. “Moving forward, we anticipate domestic as well as global economic activities will stay on upward trajectory given key economic indicators are showing signs of optimism. “Therefore, we forecast global trade will improve further this year and Malaysia as an export-reliance economy will benefit from the development via increase in exports demand and more jobs creation especially in the exports-oriented industries.”
MIDF Research pointed out that job vacancies in July were at 143,900, the highest since November 2013. The hike in job vacancies is in line with robust performance of exports and industrial production in July which expanded strongly by 30.9% y-o-y and 6% y-o-y respectively. “Looking ahead, we can expect job vacancies in August to remain high given that external trade and industrial activities stay on upbeat momentum.” MIDF Research is of the view that strong export performance since late last year has also contributed significantly towards strengthening Malaysia’s labour market. “Export growth in August for instance, rose to 21.5% y-o-y. This is the eight consecutive months of double digit growth in export for 2017.” As exports and industrial productions expanded above market expectations in August, MIDF Research said the strong results translated into better performance in employment and wage growth, especially in the manufacturing sector. “We view the upward trend in the wage growth will positively contribute to domestic consumption in the near term. Towards the end of 2017, we predict petroleum-related and export-oriented sectors will stay on upward trajectories due to steady upbeat momentum in global trade activities and gradual recovery in crude oil prices.”
