Labour market remains strong, outpacing unemployment — MIDF Research

KUALA LUMPUR: The labour market remained strong and stable in February, outpacing unemployment as it experienced a 2.1 per cent year- on-year (y- o-y) growth, said MIDF Research.

It said employment growth, however, inched down to 2.1 per cent y- o-y while 34,000 jobs were added, which reflects a healthy development of the local economy and provides solid support to domestic demand.

“We forecast Malaysia’s unemployment rate to average at 3.3 per cent in 2019. The stable labour market is expected to impact positively on the economy, supporting private consumption as it drives the domestic economy through growing consumer optimism,” it said.

MIDF Research said total job vacancies in January were recorded at 106,800, which were higher than the prior month and above 2018’s average of 91,300.

“Most of the job vacancies were contributed by the manufacturing (35,200), agriculture (26,800) and construction (16,100).

“The strong growth in job vacancies is in line with positive performance of Malaysia’s outbound shipments and industrial production in January 2018, which expanded 3.1 per cent y- o-y and 3.2 per cent y- o-y, respectively,” it said.

Looking ahead, the research house said it expects a moderating trend for job vacancies in the upcoming month, particularly in the manufacturing sector corresponding to the slowdown in February’s external trade performance.

Looking at the type of jobs that contributed to employment, MIDF Research said low value- added jobs continue to dominate the labour market.

“Malaysia’s job vacancies are mainly dominated by lowskilled jobs. For instance, 72 per cent of job vacancies in January were for elementary occupation and 15.3 per cent for operators, while the remaining 12.7 per cent for medium and high-skilled jobs.

“Job vacancies of low-skilled segments such as elementary occupations, plant and machinery operators, and assemblers were recorded at 76,900 and 16,300, respectively in January,” it said.

However, MIDF emphasised that the adverse consequences of increasing low value-added jobs among others are the rise in graduate unemployment, influx of low- skilled foreign workers, tepid wage growth and weakening domestic consumption. — Bernama