Workers in Petaling Jaya busy cleaning and installing new solar panels. (APRIL 7 2025) — ART CHEN/The Star
PETALING JAYA: Malaysia’s labour market is expected to remain stable this year, supported by resilient domestic oriented sectors as the economy continues to expand at a moderate pace.
Kenanga Research said in a report to clients that the services sector will continue to lead job creation, driven mainly by the Visit Malaysia 2026 campaign and the rollout of approved investments.
In manufacturing, hiring in the electrical and electronics segment is likely to remain firm, supported by a potential tech upcycle and rising demand for artificial intelligence, electric vehicles, 5G and robotics.
Government initiatives in high tech and digital industries, as well as the ongoing energy transition, will also underpin labour market resilience, the report noted.
It said the unemployment rate edged down to 2.9% in November (3% September), the lowest since November 2014 (2.6%), reflecting a tight labour market.
Kenanga Research added that the Statistics Department reported steady hiring in services, led by human health and social work, wholesale and retail trade, and accommodation and food and beverage services. Agriculture, manufacturing, construction, and mining and quarrying sectors also recorded gains.
By employment status, performance was mixed across groups. Employers and own account workers grew by 0.3% (October: 0.4%), both easing slightly, while unpaid family workers rebounded to 0.1% (minus 0.2% October).
Employee numbers rose 0.1% (0.1% October) for the third consecutive month.
Hong Leong Investment Bank (HLIB) Research said sustained economic momentum continues to fuel labour demand.
The improvement in the unemployment rate reaffirms that favourable labour market conditions will remain a key driver of household spending, it said.
Looking ahead, HLIB Research said it continues to anticipate a stable job market in 2026, supported by steady global and domestic growth, rising tourism activity, and government led job creation initiatives.
Against this backdrop of firm labour market conditions and manageable inflation, the bank maintains its expectation that Bank Negara Malaysia will keep the overnight policy rate unchanged at 2.75% throughout 2026.
HLIB Research also noted that Malaysia’s labour market conditions continued to tighten in November, underpinned by resilient domestic demand and supportive policy measures.
On a yearly basis, the number of unemployed persons declined further, albeit at a slower pace, while month-on-month unemployment fell by 0.1%.
In its labour market report, MBSB Research said that heading into 2026, it expects the unemployment rate to average around 3%, supported by steady employment growth and sustained opportunities, particularly in domestic oriented services, which continue to benefit from resilient household spending.
It added that key national initiatives this year are expected to generate spillover effects across the wider economy, boosting job creation and strengthening labour demand.
This, in turn, will support domestic consumption and economic growth.
MBSB Research also noted that the recent rise in employment likely reflects upbeat sentiment, as Malaysia’s trade performance remains robust despite tariffs, supported by a multi market export strategy.
