Malaysia sees decline in unemployment rate in Feb 2023

At the same time, a higher labour force participation rate was recorded.

Malaysia noted a more promising outlook in its labour force for the month of February 2023, with a high number of employed persons. 

Particularly, the number of employed persons continued to rise by 0.2% (or 30,000 persons) from 16.16mn in January 2023, recording 16.19mn persons. A seasonally adjusted estimate also showed a 0.3% increase in employment, according to the Department of Statistics Malaysia. As compared to February 2022, there was a substantial increase in employment of 2.9% (or 458,400 thousand persons) compared to 15.73mn persons.

By economic sector, the number of employed persons in the services sector continued to increase, particularly in food & beverage services; wholesale & retail trade; and administrative & support service activities. A similar trend was seen in the manufacturing, construction, and mining & quarrying sectors, as well as in the agriculture sector.

In a month, the employment-to-population ratio also saw a growth of 0.1p.p from 67.3% in January 2023, and reaching 67.4% in February. On a year-on-year basis, the ratio rose by 1.1p.p from 66.3% in February 2022.

The employees’ category comprised 75.7%, which consistently has the largest composition of employed persons. This category particularly registered a month-on-month increase of 0.1% (or 12,600 persons) from the previous month to reach 12.25mn persons in February 2023 (January 2023: 12.24mn persons). Concurrently, the own-account workers also portrayed a similar trend, increasing by 0.5% (14,700 persons) and totaling 2.89mn persons (January 2023: 2.88mn persons). According to the report, this group consists mostly of daily income earners working as small business operators such as retailers; hawkers; sellers in markets and stalls, as well as smallholders.

Unemployment rate in February 2023 fell to 3.5 per cent

The number of unemployed persons continued its downward trend, with a decline of 0.7% (4,200 persons) in February 2023. With this, the total number dropped to 591,900 persons from 596,100 in January 2023. Accordingly, the unemployment rate during the month fell by 0.1p.p to 3.5% (January 2023: 3.6%). In the meantime, on seasonally adjusted terms, the number of unemployed persons also declined by 1.5%, recording a lower unemployment rate of 3.6%.

Compared with the same month of the previous year, the number of unemployed persons was also on a declining trend, with a drop of 11.9% (79,900 persons ) from 671,800 in 2022. Consequently, the unemployment rate fell by 0.6p.p compared to February last year (4.1%).

Looking at unemployment by category, 80.3% of the total unemployed were those who were available for work and actively seeking jobs, or the actively unemployed. This category decreased by 1.3% (6,100 persons) to 475,500 persons (January 2023: 481,600 persons).

At the same time, the inactively unemployed, or those who believed that no jobs were available rose by 1.7% (1,900 persons) to record 116,400 persons (January 2023: 114,500 persons).

Higher labour force participation rate recorded 

The number of labour force in February 2023 continued its upward trend from the previous month, with a month rise of 0.2%, or equivalent to 25,800 persons, to reach 16.78mn persons (January 2023: 16.76mn persons). In turn, a higher labour force participation rate (LFPR) was recorded at 69.9% (January 2023: 69.8%). In seasonally adjusted terms, the number of labour force edged up by 0.2%, registering the LFPR at 69.8%, higher by 0.1p.p from the previous month.

Annually, the number of labour force went up by 2.3% (378,500 persons) as against 16.40mn persons in February 2022. The LFPR edged up by 0.8p.p compared to February 2022 (69.1%) as well.

At the same time, the number of persons outside the labour force in February 2023 continued to decrease, with a decline of 1,600 persons (or 0.02%) to record 7.24mn persons (January 2023: 7.24mn persons). Likewise, year-on-year, the number of persons in the outside labour force declined by 84,000 persons, or 1.1% (February 2022: 7.32mn persons). The major composition of the outside labour force was due to housework/ family responsibilities (43.2%), followed by schooling/ training with 40.6%.

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Lead image / Department of Statistics Malaysia