Malaysia’s Unemployment Rate Remains At 3.4%
Amid a wave of retrenchments, which started last year and is looking to continue throughout 2016, Malaysia’s unemployment rate was steady at 3.4% for the third consecutive month in February 2016.
This has been the highest unemployment rate since November 2013, The Star reported.
Seasonally-adjusted rate was also stable at 3.2% (unemployment rate was at 3.2% in January this year).
However, Maybank IB Research expects this figure to go up to an average 3.5% in 2016, from 3.2% last year.
Not surprisingly, total labour force increased at a slower pace at 1% year-on-year to 14.7 million while employment growth moderated slightly to +0.7% year-on-year to 14.2 million.
Meanwhile, the rise in the number of unemployed decelerated to +9.7% year-on-year to 506,000 in February compared with +11.4% year-on-year in January.
On a month-to-month basis, all the numbers of labour force, employment and unemployed increased by +0.4%, +0.3% and +1.0% respectively.
The Labour Force Participation Rate moderated slightly to 67.6% in February 2016 from 67.7% last month.
According to The Star, workers retrenchment in March to April 2016 were dominated by the manufacturing sector.
On Friday, it was reported that Intel Malaysia has for the past weeks been letting off about 600 employees involved in manufacturing the mature products for the desktop PC market to Intel’s facilities in Ho Chih Minh and Chengdu, where there is cost-savings on labour.
Meanwhile, Megasteel Sdn Bhd (subsidiary of Lion Group) issued 200 factory workers a 24-hour notice of termination on April 1, 2016.
In March 2016, British American Tobacco (BAT) announced the closure of its manufacturing plant, affecting 230 employees.
The freeze on new foreign workers intake has also caused concerns for employers and business associations, especially from the manufacturing, construction and plantation/agriculture sectors.