Malaysia’s labour market regains momentum, records higher participation in Q4 2021

KUALA LUMPUR: The national labour market has regained momentum in the fourth quarter of last year recording higher labour participation while labour demand picked up, said Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin.

He said the positive development was made possible as businesses operated with full employment capacity in longer operation hours as well as schools and educational institutions were opened with the admission of students in stages during the quarter.

On the social front, he said the removal of the interstate travel ban coupled with permission to organise social and recreational events had also stimulated domestic tourism activity.

“The positive development had resulted in the Gross Domestic Product (GDP) to rebound by 3.6 per cent after a contraction in the previous quarter. Consequently, employment continued to trend up in this quarter while demand for labour surged and attributed to the lowest unemployment rate since the pandemic hit this country,” he said in a statement yesterday.

In terms of labour supply, Mohd Uzir said higher labour participation was observed in this quarter reflected by labour force participation rate (LFPR) which edged up 0.2 percentage points year-on-year to 68.7 per cent (Q4 2020: 68.5 per cent).

He said the number of the labour force rose 1.3 per cent to record 16.14 million persons, predominantly contributed by the increment of 1.8 per cent in employed persons which accounted for 15.44 million persons (Q4 2020: 15.16 million).

“On the contrary, the number of unemployed persons lessened by 8.7 per cent to 694.4 thousand persons (Q4 2020: 760.7 thousand). This was also the first time unemployment eased to below 700 thousand since the pandemic hit. After continually challenging unemployment situation, the national unemployment rate slipped 0.5 percentage points year-on-year to 4.3 per cent (Q4 2020: 4.8 per cent) registering the lowest rate since the public health crisis,” he added.

Elaborating on the performance of labour demand, the chief statistician said total jobs in the economic sector picked up for the first time after continous decline for the last six quarters, registering a growth of 0.9 per cent year-on-year to 8.53 million jobs (Q4 2020: 8.46 million), the highest during the public health crisis. He said filled jobs which comprised of 97.8 per cent of jobs rose 0.8 per cent to 8.35 million (Q4 2020: 8.28 million), while job vacancies which made another 2.2 per cent of jobs surged 4.4 per cent to 183.6 thousand vacancies compared to 175.9 thousand recorded in the same quarter of 2020.

“Better labour demand situation during the quarter was also indicated by the 25.0 per cent increase in the number of jobs created, accounting for 20.9 thousand,” he said.

Mohd Uzir said preliminary estimates based on monthly average data indicated that the number of employed persons surged 3.0 per cent to 15.40 million persons in 2021, exceeding 15.07 million recorded during the pre-pandemic period in 2019, while the number of unemployed persons increased further by 4.3 per cent to 741.4 thousand (2020: 711.0 thousand).

He said the unemployment rate recorded during the year was at 4.6 per cent in 2021, went up 0.1 percentage point from 2020 (4.5 per cent).

“Thus, the number of labour force rose by 3.0 per cent to 16.14 million persons while LFPR edged up by 0.2 percentage points to 68.6 per cent,” he said.

Mohd Uzir said the year 2021 has also observed improvement in the labour demand as jobs in the private sector increased to 8.53 million after declining 2.4 per cent in 2020 (8.46 million).

Nevertheless, the chief statistician said the level of jobs in 2021 was still lower than 8.66 million jobs recorded in 2019 amid the socioeconomic restrictions to contain the pandemic which prolonged into 2021.

“Similarly, a total of 69.5 thousand jobs were created in 2021, lesser than 73.3 thousand jobs created in the prior year,” he added.