Unemployment rate edged up further in January — Analyst

KUCHING: Unemployment rate edged up to 3.1 per cent in January which could be attributed to the high retrenchment in the construction sector in fourth quarter 2014 (4Q14) having an impact on the labour market.

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) yesterday said it highlighted the significant increase in retrenchment in the construction sector and to an extent the services sector, in a previous report.

“In our view, the increase in unemployment for the month of January is likely due to the delay in acquiring new jobs amongst the aforementioned retrenched workers.”

LFPR declined to 67.2 per cent in January from 67.9 per cent in the previous month.

According to Department of Statistics, Malaysia, the decline in the number of workforce was due to a reduction of population aged 20 to 34 years old in the labour market. In addition, LFPR also declined from 67.8 recorded in January 2014.

“We expect real gross domestic product (GDP) growth to slow down to 4.7 per cent this year from the six per cent growth in 2014.

“The slowdown is likely to be in the construction sector and while hiring is expected to remain robust for the manufacturing and services sector, the pace is likely to moderate this year, in line with the expected slowdown in domestic demand.

“We expect the unemployment rate to stabilise within three to 3.5 per cent this year.”