Malaysia’s unemployment rate in January 2021 has increased slightly to 4.9%, as compared to 4.8% in December 2020, said the Department of Statistics Malaysia (DOSM). The number of unemployed persons, too, rose from 772,900 in December 2020 to 782,500 in January 2021.

According to chief statistician of Malaysia, Dato’ Sri Dr Mohd Uzir Mahidin, the nation’s labour market remained in a challenging situation due to the increase in Covid-19 cases, which prompted the reimplementation of movement control order (MCO 2.0) in most states. The reimplementation began on 13 January, and was subsequently extended to 4 February 2021.

“During this phase, only five essential economic sectors were allowed to operate, whereas interstate and inter-district travel activities were restricted. Indirectly, this situation has led to an uneven recovery momentum of the businesses, and consequently, the labour market,” explained Dato’ Mohd Uzir.

DOSM’s latest report also said that the continuous increase in the number of unemployed persons was partly attributed to a review of business strategies in tourism-related industries. These industries include accommodation and food services, passenger transportation, entertainment and recreational activities.

In spite of the slight bump in the unemployment rate, the statistics also indicated that the rise in employed persons was significantly higher than those who were unemployed. This pointed to some improvement in the labour demand by businesses. Specifically, Malaysia’s labour force in January 2021 went up by 0.2% to 16.02 million, with an increase of 31,500 people from 15.99 million persons in December 2020. Meanwhile, labour force participation rate crept up slightly from 68.4% in the previous month to 68.5%.

In terms of the status of employment, those in the employee category has hiked up by 0.3% (40,800 persons) from December 2020 to settle at 11.85 million persons in January 2021. This made up 77.7% of the overall employment in the country. Own-account workers (self-employed), meanwhile, continued a downward streak for the fourth month, with January 2021 recording 2.39 million persons as compared to 2.40 million persons in December 2020. This group accounted for another 15.7% of the overall employment. The remaining 6.6% of overall employment is made up of unpaid family workers (3.5%) and employers (3.1%).

Aside from that, the number of employed persons who were temporarily not working was also shown to have continued increasing from 146,200 in December 2020 to 158,900 in January 2021.

With regard to the overall labour force situation, Dato’ Mohd Uzir foresees that the labour market is expected to face some obstacles during the first quarter of the year due to the health crisis in early 2021. “Nevertheless, as the first phase of vaccination programme was started on 24 February 2021, this effort seemed to give some positive insight of the health crisis situation in Malaysia,” he said, adding that the various government initiatives will also help to alleviate uncertainties in the labour market and accelerate its recovery.

Briefly, Malaysia’s unemployment rate had risen to record heights in March, April, and May 2020 due to the Covid-19 pandemic and the implementation of the first MCO. Subsequently, June, July, August, and September saw some improvement in the numbers. However, the rate began increasing slightly again in October, November, and December.

(Source: DOSM)

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