Malaysia’s unemployment rate to average at 3.3% in 2017

In this picture taken July 31, 2009, Malaysian job seekers fill interview application forms at a booth during a job fair in Kuala Lumpur, Malaysia. (AFP Photo/Saeed Khan)

Malaysia’s unemployment rate is expected to average at 3.3% in 2017 as the domestic as well as global economic activities will stay on upward trajectory given key economic indicators are showing sign of optimism.

Therefore, the research firm forecast global trade will improve further this year and Malaysia as an export reliance economy will benefit from the development via increase in exports demand and more jobs creation in the export oriented industries.

In May, Malaysia’s employment expanded to 14.45 million while labour force grew closer to 15 million persons. With the solid growth in employment, new jobs added for the month reached 25,000.

As for unemployment, the number of unemployed person went down to 508,000 in May, the lowest in eleven months.

“Overall, we noticed strengthening trends in the labour market since early of this year commensurate with pick-up in economic growth. We believe the improvement in the labour market is due to continuous improvement in external trade activities and steady pace in domestic demand,” it said.

“We opine strong export performances since late last year has been contributing significantly towards strengthening Malaysia’s labour market,” it said.

For instance, export growth in May, rose to 32.5% year-on-year, the highest in seven years.

On the domestic front, it said distributive trade expanded by 10.7% year-on-year on the same month and in fact, Malaysia’s industrial production rose by 4.6% year-on-year in May, after two consecutive months of slowdown in the output production.

“Therefore, we are in the opinion that stout demand from both global and domestic have pushed up employment via increase in output production in May 2017,” it added.

In line with global trade activities, the research firm notices that unemployment rate across major as well as emerging economies are falling to lower level.

In addition, modest recovery in commodity prices among factors for strengthening labour market especially for commodity-based economy.