KUALA LUMPUR (Oct 7): The labour market is anticipated to improve in 2023, with the unemployment rate forecasted to reduce to 3.5%-3.7%, according to the Economic Report released by the Ministry of Finance.
This follows the improvements estimated for the whole of 2022 to 3.8%-4%, from 4.2% in the first half of 2022 (1H2022), amid stronger demand for workers by businesses and industries in meeting both external and domestic expansion.
Total employment is estimated at 15.3 million persons this year, and seen to rise 1.7% to 15.56 million in 2023.
The service sector (comprising the wholesale retail, trade, accommodation, food and beverage subsectors) is forecasted to contribute to 65.3% of total employment or 10.165 million persons in 2023, up from 65.1% or 9.966 million in 2022.
The agriculture, forestry and fishing sector is seen getting a lower share of 10% in 2023, from 10.1% in 2022, although the number of persons is seen increasing to 1.56 million, from 1.548 million.
The share of employment is seen unchanged in 2023 for mining and quarrying (0.5%), manufacturing (16.6%), and construction (7.6%).
In 1H2022, the unemployment rate stood at 4.2% or 667,000 persons. Total employment stood at 15.2 million persons.
Meanwhile, the number of registered low-skilled foreign workers rose to 1.2 million persons at end-August 2022, from 1.1 million a year ago, although the hiring remains low at 7.3% of total employment.
Comparatively, the number of expatriates stood at 86,023 persons at end-June 2022, up 5.5% from 81,539 persons a year ago.
The positive improvement in the employment rate was also reflected in the declining retrenchment number to pre-pandemic levels of 18,076 persons as at end-June 2022, the report said.
Job vacancies doubled to 508,000 positions, from 258,000 in June 2021, it added.
“However, job placements were still not encouraging despite the workers shortage issue faced by employers and incentives to increase hiring such as JaminKerja.
“Active job seekers, who are mostly with tertiary education, also declined by 57.5% to around 64,000 persons which may imply the nature of jobs, wages and benefits offered may not be attractive enough to job seekers,” it said.
For more stories on the Economic Report 2022/2023, click here.