Unemployment higher in January as tourism industries hit

Many hotels, like the Hotel Equatorial Penang, have been forced to shut down since last year; more are expected to follow suit. — LIM BENG TATT/The Star

KUALA LUMPUR: The unemployment rate in January rose to 4.9% from 4.8% in December due to tourism-related industries impacted by Covid-19, a decline in the agriculture sector despite gains by the manufacturing and services sectors.

The Statistics Department said on Monday the unemployment rate in January rose by 9,700 people to 782,500 from the 772,900 in December.

“The continuous increase in the number of unemployed persons was partly due to review of business strategies in tourism-related industries which consist of accommodation and food services, passenger transportation, entertainment and recreational activities, ” it said.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the labour market remained in a challenging situation following the rising number of Covid-19 new cases which saw the imposition of travel curbs from Jan 13 to Feb 4.

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.

Commenting on the labour force, he said the rise in employed persons outpaced those who were unemployed; signalling some improvement in the labour demand by businesses.

“Labour force in January went up by 0.2% with an additional of 31,500 persons to record 16.02 million persons (December 2020: 15.99 million persons). Slight increase in labour force participation was observed during the month with a rate of 68.5% (December 2020: 68.4%), ” he said.

Mohd Uzir, commenting on the higher unemployment figures in January, said this was partly due to review of business strategies in tourism-related industries which consist of accommodation and food services, passenger transportation, entertainment and recreational activities.

By economic sector, the number of employed persons in services sector rose month-on-month particularly in wholesale & retail trade; human health & social work and education activities.

He said the employment in the manufacturing sector grew for the third month, while the construction sector also registered an increase.

However, the agriculture and mining & quarrying sectors continued to see a decline for the seventh month.

Commenting on the overall labour force situation, he said, “In spite of the implementation of MCO 2.0, the essential services of five economic sectors were allowed to operate as usual with compliance of strict standard operating procedures.

“Hence, this has enabled some balance between the economic consequences and the public health, while adapting the new norm. Looking at the health crisis situation in early of 2021, the labour market is expected to face a little bumpy road in the first quarter.

“Nevertheless, as the first phase of vaccination programme started on Feb 24, this effort seemed to give some positive insight of the health crisis situation in Malaysia.

“Furthermore, with the various initiatives under PENJANA, PRIHATIN and PERMAI Assistance Package, may support the survival of businesses and enhance the labour force situation.

“With these efforts, the uncertainties in the labour market will possibly be alleviating and subsequently the recovery momentum of labour market may be accelerated.”