PETALING JAYA: Malaysia’s labour market is poised to improve further in 2025, supported by government initiatives, a resilient domestic economy and a robust tourism sector.
The unemployment rate is expected to gradually decline, with analysts projecting a range of 3% to 3.2% for the year.
However, external risks such as geopolitical uncertainties and potential shifts in global trade policies could weigh on the outlook.
TA Research highlighted that “the labour market is set for further improvement, building on the momentum gained from the government’s efforts to foster job growth and economic stability.”
It expects the unemployment rate to average 3.1% in 2025, potentially reaching 3% by year-end.
The research house also noted that wage-related policies, including the minimum wage increase to RM1,700 in February, will support job stability and income security.
It pointed to the positive impact of broader economic developments, such as the Johor-Singapore Special Economic Zone and rising foreign direct investment, which are likely to spur business expansion and job creation.
Similarly, BIMB Research maintained a positive view, stating that “the outlook for 2025 remains optimistic, with employment on a steady rise and unemployment remaining low.”
It projected the jobless rate to stay at a healthy 3.2%, reflecting near-full employment.
The research house identified the manufacturing sector, particularly electrical and electronics, and the services sector as key drivers of job growth.
The tourism industry is also likely to see strong momentum, driven by improved flight connectivity, targeted marketing and preparations for Visit Malaysia Year 2026.
“As the Asean chair in 2025, Malaysia will host high-profile events, drawing both leisure and business travellers,” it noted.
Hong Leong Investment Bank (HLIB) Research said Malaysia’s sustained economic expansion in 2024 led to steady job growth and a decline in the unemployment rate to 3.1% in December.
It expects employment to remain supported by “strong domestic spending, higher realisation of FDI projects, and government’s job creation initiatives.”
HLIB Research maintained its 2025 gross domestic product (GDP) growth forecast at 4.9%.
Meanwhile, Maybank Investment Bank Research maintained a stable outlook for the country in 2025, forecasting a full-year unemployment rate of 3.2%, compared to 3.3% in 2024.
The research house noted that the job market is effectively in “full employment” and that “Budget 2025 measures to lift workers income – Phase 1 of civil service pay rise and monthly minimum wage hike to RM1,700 – augur well for consumer spending outlook.
It expects real private consumption to grow by 5.8% in 2025, up from an estimated 5.2% in 2024.
Kenanga Research echoed this sentiment, stating that “we expect the labour market to remain steady in 2025, backed mainly by steady domestic demand following the impact of increased minimum wages and government salary hikes, boosting private consumption growth.”
It pointed to a robust recovery in the tourism-related sector, the realisation of approved investments and record-high federal government spending as key employment drivers.
However, the research house cautioned that “GDP growth is projected to moderate slightly to 4.8% in 2025 due to the base effect, rising external uncertainties following the renewed trade war amid a policy shift in the US administration, and normalising domestic economic activities.”
The Statistics Department data showed unemployment falling to 3.1% in December from 3.2% in November, marking the lowest jobless rate in almost a decade.
