All you need to know about Malaysia's labour market in Q3 2020

As Malaysia entered the recovery phase of Movement Control Order (RMCO) in the third quarter of 2020, the country saw a better labour market performance.

In line with that, employment increased by 211,900 people, to 15.1mn, revealed the Labour Market Review, Third Quarter 2020 report released by the Department of Statistics, Malaysia.

At the same time, the unemployment rate declined to 4.7% after recording a high quarterly rate of 5.1% in Q2 2020.

Time-related underemployment also declined compared with the previous quarter, dropping by 112,700 people to 300,800 people. However, skill-related underemployment increased to 36.8% in Q3 2020 after registering 36.5% in Q2 2020.

The report further revealed that compared with Q2 2020, job vacancies increased by 179,000; while the number of jobs increased by 88,000, to 8.47mn jobs, with 21,000 created in the private sector during Q3 2020.

As Malaysia’s economy decreased slightly by 2.7%, labour productivity per employment improved from -16% in Q2 2020 to -2.2% in Q3 2020.

During the same period, the labour productivity by value-added per hour worked in Q3 2020 decreased from RM46 per hour to RM41 per hour. At the same time, value-added per employment increased to RM23,248 per person in Q3 2020 (Q2 2020: RM19,446 per person).

Labour productivity by sector

The report also zoomed in on labour productivity in five key sectors - agriculture, mining and quarrying, manufacturing, construction, and services. 

Agriculture

In the agriculture sector, labour productivity grew by 0.6% in Q3 2020. At the same time, labour productivity by value-added per hour worked decreased from RM29 per hour in 2019 to RM 28 per hour in 2020. While value-added per employment increased from RM13,244 per person in Q2 2020 to RM14,849 per person in Q3 2020.

Mining and quarrying

Labour productivity declined by 4.5% in the mining and quarrying sector. Similarly, labour productivity by value-added per hour worked decreased to RM459 per hour in Q3 2020 (Q2 2020: RM602 per hour). Value-added per employment also decreased to RM278,831 per person in Q3 2020 (Q2 2020: RM280,302 per person).

Manufacturing

The manufacturing sector saw labour productivity rise by 6.9% in Q3 2020. At the same time, productivity by value-added per hour worked dropped to RM56 per hour in Q3 2020 (Q2 2020: RM60 per hour). On the other hand, value-added per employment increased to RM32,485 per person (Q2 2020: RM25,739 per person).

Construction

Labour productivity by hours worked in construction sector declined to -9.0% in Q3 2020 (Q2 2020: -3.2%). In terms of labour productivity level, value-added per hour worked for this sector, remained at RM18 per hour while value-added per employment increased to RM10,583 per person (Q2 2020: RM6,536 per person).

Services

Labour productivity by hours worked for services sector plunged 1.4% in Q3 2020. At the same time, value-added per hour worked in Q3 2020 dropped to RM38 per hour (Q2 2020: RM44 per hour) while value-added per employment rose to RM21,749 per person (Q2 2020: RM18,413 per person).

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