KUALA LUMPUR: The unemployment rate in January rose to 4.9% from 4.8% in December due to the impact of Covid-19 on tourism-related industries and a decline in the agriculture sector, despite gains by the manufacturing and services sectors.
The Statistics Department said 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 in a statement.
Chief statistician Datuk Seri Mohd Uzir Mahidin (pic) said the labour market remained in a challenging situation following the rising number of Covid-19 cases which saw the imposition of travel curbs from Jan 13 to Feb 4.
During the 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 31,500 persons to record 16.02 million persons (December 2020: 15.99 million persons). A slight increase in labour force participation was observed during the month with a rate of 68.5% (December 2020: 68.4%), ” he said.
On the higher unemployment figures in January, Uzir said this was partly due to a 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 the services sector rose month-on-month particularly in wholesale and retail trade, human health and 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 and quarrying sectors continued to see a decline for the seventh month.
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, he said, 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, the various initiatives under Penjana, Prihatin and Permai assistance packages may support the survival of businesses and enhance the labour force situation.
“With these efforts, the uncertainties in the labour market will possibly be alleviated and subsequently, the recovery momentum of labour market may be accelerated, ” he said.