PETALING JAYA: Malaysia’s unemployment rate increased 4.8% to 772,900 persons in December according to the latest data released by the Department of Statistics.
Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin pointed out the final month of 2020 saw the conditional movement control order (MCO) lifted in almost all states except for Selangor and Sabah, and the Federal Territory of Kuala Lumpur, along with the resumption of interstate travel from Dec 7.
He noted that although the number of new Covid-19 cases averaged 1,500 a day, economic sectors continued to operate with strict standard operating procedures (SOP).
“Thus, in December 2020, the number of employed persons edged up month on month by 0.1% to 15.22 million persons after registering a marginal decrease in the previous month,” he said in a statement issued today.
However, the employment-to-population ratio, which indicates the ability of an economy to create employment, remained unchanged at 65.1%.
Going by economic sector, services saw an increasing trend continue largely in wholesale and retail trade; human health and social work; communication and information; and education activities.
Employment in tourism-related industries such as accommodation and food services; transport and storage; and arts, entertainment and recreational activities remained on a declining trend, reflecting the consequences of the pandemic to this industry.
In the manufacturing sector, employment continued to record positive growth, whereas the agriculture and mining and quarrying sectors remained in negative territory for the fifth month.
Similarly, the construction sector posted a decrease month on month.
In terms of employed persons by status of employment, the employee category comprised 77.6% of overall employment, augmented by 0.2% to 11.81 million persons from the previous month.
The number of own-account workers, made up of daily wage earners working at farmers’ markets, night markets and stalls; freelancers; as well as smallholders, which account for 15.8% of overall employment, decreased for the third month in a row, falling by 0.6% to 2.4 million persons in December 2020.
The number of employed persons who were temporarily not working increased to 146,200 persons from 142,000 persons in November 2020, due to the implementation of phases of MCO throughout the whole month as well as a short school break and festive holidays.
In December, labour market conditions were still influenced by the Covid-19 pandemic and its economic consequences have caused slower recovery momentum.
The labour market remained competitive with the number of labour force increased to 15.99 million persons (November 2020: 15.96 million persons) and the labour force participation rate (LFPR) remained at 68.4%.
The number of persons outside the labour force registered a decrease of 2,600 to 7.37 million persons compared with November 2020 with the largest composition due to schooling/training.
The labour market conditions improved gradually with the labour force and employment situation continuing to increase compared with the preceding quarter, recording 15.92 million persons and 15.16 million persons respectively, said Mohd Uzir.
Meanwhile, the number of unemployed persons increased 0.1 percentage point from 4.7% in third-quarter 2020 and the LFPR improved 0.1 percentage point to 68.5%.
In the fourth quarter of 2020, there were 533,700 persons who worked less than 30 hours per week due to working conditions or insufficient work, against 403,800 persons in the previous quarter.
The chief statistician observed that for 2020 the LFPR edged down 0.3% to 68.4% against 68.7 in 2019, and the number of employed persons decreased by 0.2% to 15.1 million persons.
“The marginal decrease was due to the uncertainty in the labour market following the health and economic crises during the year,” he said.
“The health crisis has given a huge impact on the labour force which led to the unemployment rate rising above 4% as against an average of 3% recorded in the pre-crisis period. Thus, the unemployment rate rose to 4.5% in 2020, the highest rate recorded since 1993 (4.1%).”
Towards the end of last year, Malaysia passed the 100,000 mark in Covid-19 cases and January 2021 saw the number of new cases exceeding an average of 3,200 daily.
With that, the operation of certain activities remained restricted such as social gathering, cinemas and entertainment and recreational activities.
‘Hence, it is foreseen that Malaysia’s labour market will remain in a challenging situation in early 2021 but various assistance and initiatives introduced by the government will cushion the impact of the pandemic to the labour market,” said Mohd Uzir.
In a note, UOB Research said it expects recovery to pick up from the second quarter onwards as the National Covis-19 Immunisation Programme gets under way.
“We reiterate our 2021 unemployment rate forecast of 4.0% (MOF official forecast: 3.5%) on the back of an uneven economic recovery,” it said.
