‘A recovery path in labour market will be more evident in upcoming months’

KUCHING: A recovery path in Malaysia’s labour market will be more evident in upcoming months as businesses adapt to the ‘new normal’ and current standard operating procedures, analysts observe.

For now, analysts have retained their forecast on Malaysia’s unemployment rate at four per cent for the year, with unemployment set to remain high over several months.

The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) highlighted that the country’s unemployment rate fell slightly to 4.9 per cent in June 2020, with more businesses reopening and resuming its operations.

“The unemployment is still on a high note as firms are not operating at full capacity yet and are being challenged by the new normal,” MIDF Research said.

“In particular, tourism related sectors such as aviation and hotel could not operate at full capacity due to closure of international borders.”

It noted that during the month, employment fell softer at one per cent year on year (y-o-y), compared to 1.6 per cent y-o-y in May 2020, while unemployment growth slowed to 48.3 per cent y-o-y versus 58.9 per cent y-o-y in May 2020.

“A recovery path in the labour market will be more evident in upcoming months as businesses adapt to the new normal and SOP.”

On job vacancies per month, MIDF Research recapped that based on the latest available data in May 2020, figures increased to 11,500.

“However, it was still lower than pre-pandemic levels. “

According to the research arm, the low vacancy numbers in May 2020 was a result of the prolonged impact of Movement Control Order (MCO) as economic activities were abruptly halted from March 18, 2020, causing many small businesses to close down.

All in, MIDF Research retained its unemployment rate forecast at four per cent.

“We maintain our forecast for the unemployment rate at four per cent for the year, with unemployment to remain high over several months.”