Malaysia to see slight moderation in employment growth

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Malaysia’s full employment state is expected to continue in 2020, while analysts also note that slight moderation could be observed in the employment growth this year. — Bernama photo

KUCHING: Malaysia’s full employment state is expected to continue in 2020, while analysts also note that slight moderation could be observed in the employment growth this year.

“Malaysia’s unemployment rate will maintain under state of full employment in 2020 but with an upward tick to 3.4 per cent,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) opined in its 2020 outlook report.

“Slight moderation could be observed in the employment growth (this) year due to the slowdown in both domestic and global economies.

“Still weak exports and moderating domestic consumption will affect the manufacturing sector in particular and could weigh down on employment opportunities.”

The research arm recapped that the manufacturing sector has the second biggest share of total employment in the country at almost 20 per cent after services sector (60 per cent).

On skill composition, MIDF Research expected an increasing share of high and medium
skilled labour to total labour force.

“In term of skill composition, we could expect increasing share of high and medium skilled labour to total labour force moving forward corresponding to government’s initiative to develop human capital by encouraging more participants in TVET field and matching universities’ programme to industrial requirement as highlighted in the Share Prosperity Vision 2030.

“Strong employment plays a significant role to boost private consumption and investment which subsequently facilitate economic growth.

As for the labour market, MIDF Research observed that it has strengthened, as the labour force and employment returned to two per cent year on year (y-o-y) growth with 44,100 jobs added in September 2019.

“Overall, Malaysia’s economy remains operating at full-employment condition as jobless rate remains at low level of 3.3 per cent. Job vacancies continue to be dominated by low-skilled type of jobs.

“However, the share of elementary occupations to the total vacancies in August 2019 went down to 64.4 per cent, the lowest since December 2016.

“The remaining 35.6 per cent are for medium and high-skilled jobs, particularly for Senior Officials, Professionals and Technicians.”