Malaysia’s jobless persons rise 16pct in March

The Covid-19 pandemic has dealt a massive blow to the Malaysian labour market as the number of unemployed persons surges 16.2 per cent year-on-year in March.  The New Straits Times reports:


This means there were 610,500 people without any job as of March, according to the Department of Statistics Malaysia (DOSM).

This led to an unemployment rate of 3.9 per cent as of March, way off reportedlyan all-time of 7.9 per cent recorded in 2017.

The department said with mobility restricted and social distancing rules, the labour force participation rate (LFPR) had dropped 0.1 percentage point month-on-month to 68.6 per cent in March.

The labour force fell 0.2 per cent during the same period to 15.8 million persons.

“As the Movement Control Order (MCO) affected half of March, the number of unemployed persons increased by 16.2 per cent over the month to 610,500 persons.

“In the first quarter (Q1) 2020, total jobs in the private sector which comprised filled jobs and job vacancies went up by 18,000 to 8.6 million,” DOSM said.

Following the slower growth of filled jobs and decrease in job vacancies, the number of jobs during the fquarter grew marginally compared to the past four quarters in 2019, it added.

DOSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the national labour productivity had declined 0.8 per cent from 1.4 per cent in the fourth quarter (Q4) 2019.

The value added per employment stood at RM22,578 per person in Q1 2020 (Q4 2019: RM24,263 per person).

“Despite slower economic performance at 0.7 per cent, employment increased 1.6 per cent (Q4 2019: 2.2 per cent) which recorded 15.2 million persons in Q1 2020 (Q4 2019: 15.3 million persons),” Uzir said during the virtual press conference on labour productivity today.

He said Malaysia’s labour productivity for Q1, as measured by value added per hour worked, rose 2.1 per cent (Q4 2019: 1.4 per cent) with a value of RM40 per hour (Q4 2019: RM42 per hour).

The increase was due to larger decline in hours worked as against moderation in the output produced.

“The implementation of the first phase of the MCO to contain the Covid-19 pandemic starting March 18 has caused a decline in total hours worked during this quarter.

“From the viewpoint of economic sectors, all sectors recorded a drop in labour productivity per employment except services sector, which recorded slower growth.”

As for labour productivity per hour worked, Uzir said three sectors namely mining and quarrying, services and manufacturing had posted positive growth, whereas construction and ahriculture sectors recorded negative growth.

The average hours worked in the first quarter was only 44.3 hours per week (Q4 2019: 45.0 hours per week).

Value added, which indicates domestic output of goods and services produced, grew marginally at 0.7 per cent in Q1 2020 compared to 3.6 per cent in the preceding quarter.

Uzir said the decline in labour productivity per employment during the challenging period was due to most industries retaining their employment despite moderated growth in production.

He also said the performance of labour productivity per hour worked increased due to the significant reduction in hours worked particularly during the MCO and not influenced by the automation in the industry.

“Despite the economic shock, industries with high technology were able to maintain their productivity and business.

“Capital intensive industries with adoption of automation are more resilient and thus higher labour productivity as compared to labour intensive industries.”

Citing an example, he said food and beverage service activities in Malaysia which are synonymous with high capacity of manpower, would face a contraction in labour productivity during a crisis such as the Covid-19 pandemic.

Uzir said industries should leverage on the crisis to reassess existing business structure by innovating towards a new normal of doing business.

“As most industries in the country are still labour intensive, currently for each production worth RM1, the compensation to workers is only 36 sen,” he added.

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