KUCHING: Youth unemployment rate remains high with 10.5 per cent with number of unemployed youth reached 273,400 persons in 2016.
According to MIDF Amanah Investment Bank Bhd (MIDF Research), youth labour force refers to those below the age of 25 and this group constitutes about 17.8 per cent of Malaysia’s total labour force in 2016.
“Among the age groups, youth unemployment rate remains the highest, registering double-digit rate since 2012. Youth employment rose by 46,700 last year, reducing youth unemployment rate by 0.2 per cent as compared to a year earlier,” it said in a note yesterday.
“Economic slowdown causes youth unemployment to remain high. Malaysia’s economy grew by 4.2 per cent last year, the lowest since 2010. Persistent low global commodities prices impacted our economy to decelerate which saw investment and exports of goods and services expanded at modest pace by 2.7 and 0.1 per cent espectively in 2016.”
The slowdown in economic activities, MDIF Research said, is one of the major factors that drive up unemployment among the youth. During economic slowdown, weak demand affects business activities through small growth in industrial production which leads to less hiring.
“Additionally, those with lack of work experiences and skills especially the youth will be left out from the job market as businesses are minimising cost during the through period,” it added.
“Moving forward, we opine youth unemployment rate to soften this year given better economic prospect for 2017. Rise in business confidence in the recent months could be translated into better business activities and hiring. We forecast Malaysia’s economy and industrial production to grow by 4.9 per cent and 5.3 per cent respectively for 2017.”
High youth unemployment rate is norm in global economy, MIDF Research said, due to misalignment in labour market. Mismatch between supply and demand mainly causes high unemployment among the youth.