Malaysia's labour market to remain stable in 2024

Malaysia's labour market is projected to remain stable in 2024, with the average unemployment rate at 3.2%, according to Kenanga Investment Bank Bhd (Kenanga IB).

It reflected the growth of the employment market in recent times, the bank said, adding that this is largely attributed to the expected steady expansion in economic activities driven by strong domestic demand.

Malaysia’s labour market is expected to strengthen further in 2024 due to encouraging momentum in the domestic economy and recovery in external trade. (Photo: www.nst.com.my)

The bank forecast gross domestic product (GDP) growth to reach 3.3% in the first quarter of 2023 with an overall GDP growth rate for the whole year ranging from 4.5-5%.

However, Kenanga IB said structural issues in the labour market remain concerning, particularly the persistent among youth (age between 15-24 years), which remained at 10.6% in February for the fourth consecutive month, affecting 306,600 people. It noted that skill-related underemployment stood at 37.4%, reaching a record high of 1.94 million people in Q4 of 2023.

Hong Leong Investment Bank Bhd (HLIB) stated that Malaysia’s is expected to benefit from a recovery in tourism activities and its spill-over effect on related sectors such as wholesale and retail trade, food and beverage, and accommodation, as well as the implementation of national projects.

It also said that the improving global trade environment and the implementation of foreign direct investment projects in the pipeline could lead to better employment conditions in export-oriented sectors.

The National Human Resource Policy Framework, which is set to be launched by the government in May, is expected to help achieve the target of a 35% skilled workforce by 2030, HLIB added.