PETALING JAYA: Malaysia’s unemployment rate is expected to remain affected going into the second quarter of this year, as the impact from the movement control order (MCO) and now conditional MCO, continues to weigh on both business and consumer confidence.
Malaysian Employers Federation executive director Datuk Shamsuddin Bardan said that while some businesses have commenced operations already, not everyone is back to “full swing.”
“Most businesses that are operating are still not in full force yet. They are around 30% and 50% capacity and are still lingering from the effects of the Covid-19 pandemic on the economy, ” he told StarBiz.
“As such, their revenue might only be around half or one-third of what they normally earn. But they still have to pay all of their employees. As it is unclear whether the CMCO will be extended, the longer it is imposed, the more it will affect the country’s unemployment rate.”
AmBank Group Research said in a report that the country’s economic performance was expected to worsen in the second quarter, before staging a modest recovery in the third quarter and then record further improvements in the final quarter, supported by the relief and recovery measures.
“On that note, we expect the unemployment rate to hover around 4.5% and 5% for the year, ” it said.
According to the Department of Statistics Malaysia (DOSM), Malaysia’s monthly unemployment rate in March 2020 increased to 3.9%, the highest it has been since June 2010, which was 3.6%.
The highest unemployment rate in the country ever recorded was at 7.4% in 1986.
“The high unemployment rate in March 2020 reflects the negative impact of the movement control order on the labour market, ” said chief statistician Datuk Seri Mohd Uzir Mahidin when releasing the report last week.
The number of unemployed persons increased to about 610,000 for this month, compared to 521,000 recorded in the same month in 2019.
The high unemployment rate in March has contributed to an overall higher unemployment rate for the first quarter of the year 2020, which was recorded at 3.5%.
Shamsuddin said the unemployment figures will likely be worse in April as there was completed business shutdown during the entire month.
Meanwhile, citing the Monster Employment Index (MEI) index, Maybank Investment Bank Research noted that there has been a decline in online job postings.
It said the index was dragged by the declines in the sectors of logistics, courier, freight, transportation, shipping and marine, .
Other sectors included retail, engineering, construction and real estate, banking, financial services and insurance, hospitality and travel, production/manufacturing, automotive and advertising, market research, public relations and media as well as entertainment.
“In contrast, growth in online hiring by information technology (IT), telecom/ Internet service providers and the business process outsourcing/IT-enabled services sector moderated by 3% year-on-year in March and 14% year-on-year in February.
“Surprisingly, despite the weak global crude oil price and market, online hiring by the oil and gas sector rebounded 6.1% year-on-year in March.”
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