Tight restrictions were put in place to curb the Covid-19 pandemic, including lockdowns.
KUALA LUMPUR: Malaysia recorded an increase in the unemployment rate in June this year due to the impact of the tighter restrictions to curb the spread of the Covid-19 pandemic.
The latest data by the Statistics Department showed June unemployment rose by 4.8% to 768,700 from 4.5% in May after four consecutive months of decreases.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said year-on-year, the unemployment rate edged down by 0.1 percentage point as compared to 4.9% in June 2020.
The number of unemployed persons declined by 4,600 from June last year’s 773,200.
“Hence, the number of employed persons in June 2021 declined by 0.5% to record 15.30 million persons (May 2021: 15.37 million persons) while employment-to-population ratio fell by 0.4 percentage points to 65.0 per cent.
“Subsequently, the unemployment rate climbed to 4.8% (May 2021: 4.5%),” he said.
Commenting on the June labour data, Mohd Uzir said it was a challenging labour force situation as the country continued to take steps to flatten the surge of Covid-19 cases.
The rise in new daily cases has resulted in the implementation of Full Movement Control Order (MCO) during the month whereby only essential economy and services sectors were permitted to operate.
They were business activities related to food & beverages, utilities, security, health & medical care, transportation, banking, communications and essential construction activities.
Small businesses such as food or beverage stalls or hawkers were also allowed to operate during this period.
“Hence, the number of employed persons in June 2021 declined by 0.5% to record 15.30 million persons (May 2021: 15.37 million persons) with employment-to-population ratio fell by 0.4 percentage points to 65%.
Mohd Uzir said the number of unemployed persons increased by 40,600 persons (+5.6%) to 768,700 (May 2021: 728,100).
Year-on-year, the unemployment rate edged down by 0.1 percentage point as compared to 4.9% pin June 2020 while the number of unemployed persons reduced by 4,600 persons (June 2020: 773,200 persons).
He pointed out that also some members of the labour force had moved into inactivity which led the number of labour force declining to 16.07 million persons versus 16.10 million persons in May 2021.
“This was the first decrease of labour force recorded since April 2020 when the pandemic hit the country. Accordingly, lower labour force participation rate (LFPR) was registered at 68.3 per cent (May 2021: 68.5%),” he said.
Employed persons by economic sector in June 2021 showed that all sectors registered declines in employment with Services sector posted month-on-month decreases for the first time after twelve months of increases.
The reduction in services sector was largely in accommodation and food & beverages services; Real estate; and wholesale & retail trade activities.
By status of employment, employee’s category (77.6%) which was the largest composition reduced by 56,700 (-0.5%) to 11.87 million persons (May 2021: 11.93 million persons).
He added the own-account workers saw an increase by 4,100 persons to 2.50 million persons (May 2021: 2.49 million persons).
“Following the implementation of the Full MCO throughout the month, the number of employed persons who were temporarily not working increased significantly by 661.4 thousand persons to record 801.1 thousand persons as against to May 2021 (139.6 thousand persons).
“A similar situation was observed during the first implementation of MCO last year whereby number of employed persons who were temporarily not working surged,” he said.
Labour force in June 2021.
Elaborating further on the unemployment situation during the month, Mohd Uzir said: “The actively unemployed or those who were available for work and were actively seeking job encompassed 83.6% from the total unemployed persons.
“This number went up by 33.0 thousand persons to record 642,900 persons (May 2021: 609,900 persons).
“Those who were unemployed for less than three months accounted for 52.3% of the actively unemployed while 9.8% was those who were in long-term unemployment of more than a year,” he said.
Skill-related underemployment which comprises of those with tertiary education but working in semi-skilled and low-skilled occupations went up by 2.5% to register 1.85 million persons or 37.7%
of the total of employed persons with tertiary education (1Q 2021: 1.90 million persons; 37.9%).
He also said in terms of unemployment situation by state, the highest unemployment rate in the
2Q, 2021 was recorded in five states -- Labuan (8.8%), Sabah (8.7%), Perlis (5.3%), Kelantan (4.8%) and Selangor (4.4%).
However, Penang (73.5%), Kuala Lumpur (73.4%), Selangor (74.9%), Sarawak (69.4%) and Sabah (66.7%) recorded higher labour force participation rate during the quarter.
“The country is still combatting the rising number of new daily Covid-19 cases and if the current health crisis persists, the economy and labour market will continue experiencing uneven recovery momentum.
“Therefore, herd immunity is essential towards loosening up the containment measures, thus allowing businesses to resume their operation,” he said.
Mohd Uzir said the National Covid-19 Vaccination Programme is speeding up the pace hence it may boost the households and businesses confidence to stimulate economic activity.
“Moreover, various initiatives are also implemented to support business continuity through Pakej Pelindungan Rakyat dan Pemulihan Ekonomi (Pemulih or National People’s Well-Being and Economic Recovery Package).
“With these programmes, the economy and labour market activities may rebound, not considering the new and more lethal Covid-19 variants,” he said.
Since the Covid-19 pandemic was declared in March last year, the government has launched eight stimulus packages worth RM530bil to address the crisis.
The latest package, Pemulih, is worth RM150bil and was unveiled on June 28, 2021, to further mitigate the economic impact caused by the pandemic.
Labour Force in the second quarter ended June 30, 2021.
