PETALING JAYA: Malaysia’s economy remains resilient despite external headwinds, with the labour market at full employment at the end of March.
While Social Security Organisation or Socso, reported loss of employment cases of 5,900 cases in March (April: 7,900), data from the Statistics Department showed the unemployment rate in the country remained unchanged at 2.9% at the end of March – for the fifth consecutive month.
Labour force participation rate also remained firm at 70.9% in March, supported by continued employment growth in sectors like services and manufacturing.
The labour force continued to expand In March, rising by 0.03% year-on-year (y-o-y) to 17.3 million persons.
Hence, economists remain confident in the local economy providing sustained jobs opportunities on the back of firm domestic demand.
“We continue to expect Malaysia’s labour market will remain relatively insulated from the global energy supply risk, buffered by resilient domestic economic activity and sustained global appetite for electrical and electronics exports.
“That said, downside risks, stemming from elevated global energy prices and some production disruption could weigh on employment outlook.
“We remain cautious and maintain our gross domestic product growth projection of 4.5% year-on-year in 2026,” Hong Leong Investment Bank (HLIB) Research noted in a report .
BIMB Research warned that despite the jobless rate being at the lowest since 2014, it foresees a softening in the job market in the second half of the year due to the ongoing global energy crisis, supply disruptions and modest global demand.
Hence, the research house has projected the average unemployment rate for 2026 to stand at 3.1%.
The Statistics Department’s noted total employment in March had increased by 0.2% y-o-y, underpinned by broad-based job creation across most major economic sectors.
This led to unemployed persons declining by 3.9% y-o-y to 509,000 persons in March, according to a TA Research report recently.
The services sector remained the largest contributor to total employment in March 2026, particularly in accommodation and food and beverage services, information and communication activities, as well as transportation and storage activities, reflecting continued strength in domestic demand, tourism-related activities and digitalisation trends.
The manufacturing, construction and agriculture sectors also recorded increases in employment, supported by ongoing investment activities, infrastructure projects and steady commodity-related demand.
Employment in the mining and quarrying sector registered a slight decline in March likely reflecting cautious hiring sentiment amid external geopolitical tensions, oil price volatility and temporary disruptions in global energy-related activities.
TA Research added the moderation in mining employment may also be linked to maintenance activities and slower production adjustments within the crude oil and natural gas segments.
It believes steady domestic demand, improving tourism activity, continued investment expansion, and structural shifts towards higher-value industries will support household spending and broader economic growth in 2026.
This will ensure the unemployment rate remains low which the research house projected to improve further to 2.8% by end-2026.
