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Malaysia’s January unemployment rate rises slightly to 4.9%

09 Mar 2077 / 22:51 H.

PETALING JAYA: The unemployment rate rose slightly to 4.9% in January, from 4.8% in December, to 782,500 persons, partly due to review of business strategies in tourism-related industries which consisted of accommodation and food services, passenger transportation, entertainment and recreational activities.

Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin said entering 2021 the labour market remained in a challenging situation following the rising number of Covid-19 new cases, and the ensuing movement control order 2.0 (MCO 2.0) indirectly led to an uneven recovery momentum of the businesses and consequently, the labour market.

“During the MCO 2.0, only essential economic sectors which includes manufacturing, construction, services, distributive trade, as well as plantations and commodities were allowed to operate. Meanwhile, 30% of the employees in the management group were allowed to be in the office whereas support group employees were subject to necessity,” he said.

This situation had caused the number of employed persons to increase with an addition of 21,900 persons to 15.24 million persons in January 2021. Thus, the employment-to-population ratio which indicates the ability of an economy to create employment rose to 65.2%

On the other hand, the labour force condition recovered modestly in January, reflected by the increase in the number of labour force during the month, going up 0.2% to record 16.02 million persons. There was also a slight increase in labour force participation was observed during the month with a rate of 68.5%, from 68.4% in December.

Commenting further on the status of employment, Mohd Uzir said the employee’s category which encompassed 77.7% of employed person, enlarged by 0.3% to 11.85 million persons.

However, own-account workers comprising of 15.7% continued to decrease for the fourth consecutive month to 2.39 million persons in January 2021. This group comprised mostly of daily income earners working as small business operator such as small retailers; hawkers; sellers in markets and stalls as well as smallholders.

Meanwhile, the number of employed persons who were temporarily not working continued to increase in January 2021 to 158,900 persons compared with the previous month.

“This group who were most likely not able to work was not categorised as unemployed as they had work to return to. Outside labour force continued to decline for the second month, with a decrease of 6,000 persons to 7.37 million persons in January 2021,” said Mohd Uzir.

Overall, he added that as the essential services of five economic sectors were allowed to operate as usual with compliance of strict standard operating procedures has enabled some balance between the economic consequences and the public health, while adapting to the new norm.

“Looking at the health crisis situation in early of 2021, the labour market is expected to face a bumpy road in the first quarter. Nevertheless, as the first phase of vaccination programme was started on Feb 24, this effort seemed to give some positive insight of the health crisis situation in Malaysia.

“Furthermore, with the various initiatives under Penjana, Prihatin and Permai assistance packages, it may support the survival of businesses and enhance the labour force situation. With these efforts, the uncertainties in the labour market will possibly be alleviating and subsequently the recovery momentum of labour market may be accelerated.”

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