Malaysia's Unemployment Rate Decreases Again

The Malaysian labour market has improved in July, with the unemployment rate declined for the second consecutive month, said Minister in the Prime Minister’s Department (Economy), Datuk Seri Mustapa Mohamed.

He stated data from the Department of Statistics Malaysia today showed that the unemployment rate dropped to 4.7% July, compared to 4.9% in June and 5.3% in May. According to him, there are 745,100 unemployed persons in July, a decrease of 28,200 people compared in June.

He also said that employment in a number of economic sectors had risen since June 2020, most significantly in the services sector such as:

• Accommodation,
• Food and beverage activities,
• Arts, entertainment and recreation,
• Transportation,
• Information and communications technology-related activities such as e-commerce and e-hailing.

Improvement of the labour market

The minister said that the recovery in economic activities helps to improve labour market conditions. The Industrial Production Index (IPI), which comprises three primary sectors: mining, manufacturing, and electricity, reported positive growth at 2.1% year-on-year (y-o-y) in July 2020 after declining for four consecutive months since March 2020.

The manufacturing index's 2.9% growth helped to improve the IPI, Mustapa added. But, the mining index and the electricity index recorded a drop of 3.0% and 5.1%, respectively. Moreover, the manufacturing sector’s sales value maintained its positive growth in July 2020, rising by 1.9% y-o-y to RM119.3 billion from RM117 billion previously.

The unemployment rate has decreased to 4.7% in July 2020.

The growth was largely attributed to the improvement in the food, beverage and tobacco products, which grew by 24.9%, transport and other manufacturing products (14.3%), and electrical and electronic equipment (8.4%).

“This achievement is better than the 8.4% contraction in June 2020 and is the highest sales value since the movement control order was executed due to the recent pandemic.

“The recovery of the labour market and economic activity is in line with the government’s decision to gradually reopen the economy since May to allow more businesses to operate. Now, almost all economic activities have resumed,” he said.

The role of stimulus packages

The government’s economic stimulus packages also accelerated the country’s economic recovery process. These stimulus packages are:

• Economic Stimulus Package 2020,
• Prihatin Rakyat Economic Stimulus Package (PRIHATIN) ,
• National Economic Recovery Plan (Penjana).

“Although the labour market is recovering, the government is aware and concerned that the number of unemployed (745,100) is still higher compared to the average of 494,000 people for the 2016-2019 period.

“Furthermore, there are still 104,300 people (908,900 people in June 2020) who are on furlough, and they are not categorised as unemployed because they still have a job and will return to work eventually,” he said.

Mustapa maintained that the government will proceed to concentrate on efforts to stimulate the country’s economic recovery to generate more job opportunities so that more people can return to work.

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Source: Bernama

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