KUALA LUMPUR (Aug 11): As business activities start to pick up with restrictions eased during Malaysia's Recovery Movement Control Order (RMCO), employment data could start improving as early as the current quarter, said Credit Suisse Malaysia head of research of global markets APAC Danny Goh.

“We are hoping there will be gradual rehiring in 3Q and 4Q this year. Private consumption that drives 60% of GDP is the key to drive the recovery,” he pointed out.

“We need to see the percentage of people who have lost their jobs and how many are re-employed by this 3Q and 4Q,” he noted last Thursday at RHB Asset Management's webinar on Malaysia: Time for a Reality Check?

Goh said the vulnerable segments of the labour force today according to data are the tourism-related sectors, which account for 32% of the labour force. 

Malaysia’s unemployment rate had hit a record high of 5.3% in May 2020 due to the Covid-19 pandemic impact on global economies. 

Nevertheless, Malaysia's June 2020 unemployment rate had declined month-on-month to 4.9% from the record high of 5.3% in May 2020 as more sectors reopened due to the implementation of the nation's RMCO to revive the country's economy while at the same time, curb the Covid-19 pandemic.

The increase in the number of persons employed was apparent in the services sector, as the segment observed its first month-on-month growth since January 2020. 

The Department of Statistics Malaysia noted that among others, employed persons rose within the e-commerce activity, delivery services and information and communication technology-related activities.

Data also show that the actively unemployed for less than three months reduced by 3.1% compared to the previous month. Meanwhile, the inactively unemployed or discouraged group who believed there were no jobs available shrank by 29%.

The employment-to-population ratio increased 0.3 percentage points from the previous month to post 64.7%.

UOB Global Economics & Markets Research team noted last Friday (Aug 7) that it continues to see encouraging signs that labour market pressures may be easing.

This, it said, includes a drop in June’s unemployment, higher job vacancies, and fewer new recipients under the employee wage retention and wage subsidy programs. 

It added that approximately 12.7 million or 83.5% of employees have started working as at June 2, 2020 versus 10.2 million or 67.2% on May 17, 2020.

“The number of persons categorized as temporarily not working but not classified as unemployed because they have work to return to, fell to 768,000 persons in June (May: 2.27 million),” UOB stated.

“Latest export and manufacturing output were positive in June, supporting employment gains across these sectors while employment has also picked up in the services sector,” it added 

UOB expects the unemployment rate to stabilise between 4% and 5% as economic conditions continue to normalise and businesses adjust in a new post-pandemic environment.

Meanwhile, over in the UK, official data revealed recently show that employment there fell by the largest amount in over a decade between May and July.

Employment decreased by 220,000 in the April to June 2020 quarter, said the UK.