BNM: Unemployment rate up amid softer employment prospects

KUALA LUMPUR (March 23): The labour market remained broadly stable in 2015, as the continued expansion across all economic sectors sustained the demand for labour.

According to Bank Negara Malaysia’s Annual Report 2015, the labour force participation rate stood at 67.6% compared with 67.5% in 2014.

However, the unemployment rate also edged higher to 3.2% last year from 2.9% in 2014, as more cautious business sentiments led to softer employment prospects towards the second half of the year.

The number of workers laid off totalled 21,713 persons, or approximately 0.2% of total employment, mainly attributable to the decline in global oil prices and reorientation of multinational firms’ business strategies.

These lay-offs were conducted on a global and regional scale, particularly among oil and gas companies and manufacturers in the electrical and electronic sub-sector.

Among domestic companies, Malaysian Airline System Bhd implemented a large corporate transformation exercise, while financial services firms took steps to enhance their operational efficiency, in line with global trends in the financial services industry.

Total employment continued to expand to 13.8 million workers from 13.5 million workers in 2014. The net addition of 226,000 jobs came mainly from the services sector (223,000 jobs), particularly in the distributive trade, education, and human health and social work sub-sectors.

The construction sector registered net employment gains of 54,000 jobs, while employment growth in the oil and gas sector remained steady (net gain of 19,000 jobs), despite large scale-backs during the year.

In terms of skill levels, employment gains were mainly concentrated in the high-skilled occupations, reflecting a continued shift of the Malaysian economy towards becoming a higher value-added economy.

However, demand for low-value production and low-skilled workers remained high, as evidenced by the number of registered foreign workers, which increased to 2.14 million workers from 2.07 million workers in 2014. The agriculture and construction sectors registered the highest dependence on foreign labour.

Labour productivity, as measured by real value-added per worker, grew by 3.2% from 3.5% in 2014, driven mainly by productivity increases in the manufacturing sector.