KUALA LUMPUR (Nov 11): Economists expect Malaysia’s labour market to stay strong through 2026, with full employment supported mainly by the services and construction sectors despite external trade risks.
Apex Securities said services, which make up about two-thirds of total employment, are expected to lead hiring, backed by strong consumer spending and steady investment. Gross domestic product (GDP) growth is projected at around 5% for both 2025 and 2026.
The manufacturing sector has also performed better than expected, with exports up 6.8% in the third quarter of 2025, though hiring may be uneven, according to the October manufacturing purchasing manager’s index, the firm said.
Employment growth averaged 0.2% month-on-month in the first nine months of 2025, with jobs increasing across services, manufacturing, construction, mining, and agriculture. The unemployment rate remained around 3%.
Economists said the latest job figures reaffirm steady domestic demand and a healthy consumer spending outlook.
Most economists retain their 2025 GDP growth forecasts at about 4.5%, citing continued policy support, according to the median forecast of six research houses tracked by Bloomberg.
MBSB and Kenanga noted that domestic-oriented demand, including household spending and tourism recovery, continues to underpin hiring in retail, accommodation, and food and beverage sectors.
Meanwhile, TA Securities added that ongoing infrastructure projects and investment flows — including initiatives supporting green growth and electric vehicle production — are likely to sustain job creation.
Policy support under Budget 2026 and the 13th Malaysia Plan was also cited as a key driver of employment, with initiatives such as technical and vocational education and training programmes, small and medium enterprise assistance, and public investment expected to bolster workforce participation, according to UOB’s note.