PETALING JAYA: The job market is likely to remain resilient through the second half of financial year 2026 (2H26), with domestic demand and investment activity continuing to support hiring despite a more uncertain external environment.
Employment growth may moderate, but a still-high level of vacancies and improving economic activity should help keep unemployment near historically low levels.
Kenanga Research maintained its 2026 unemployment rate forecast at 2.9%, compared with 3% in 2025, citing solid domestic activity and continued hiring support from certain sectors.
“Hiring should remain supported by resilient domestic demand, stronger tourism flows from the Visit Malaysia 2026 campaign, Formula One-related activities at Sepang, and the ongoing global electrical & electronics upcycle,” it said.
The research house noted that labour market conditions remain broadly stable despite persistent geopolitical uncertainties.
However, layoffs have picked up, with the Social Security Organisation’s MYFutureJobs data showing Loss of Employment cases rising to 9,013 in July from 8,100 in June.
Another 2,746 cases were recorded as of Aug 10.
Manufacturing accounted for 19% of layoffs, followed by wholesale and retail trade at 18%, with mutual separation and voluntary separation schemes, alongside corporate restructuring, driving the increase.
Still, the sharp rise in vacancies provides some cushioning.
Active job vacancies climbed to 242,434 at end-July from 103,394 a month earlier, although job placements eased to 15,392 from 16,620.
TA Research expects the labour market to stay broadly resilient in 2H26, although employment growth could moderate further.
Stable domestic conditions and continued investment should support labour demand, particularly in higher-value industries, although global energy markets, geopolitical developments and external trade conditions could weigh on costs and hiring decisions.
“Productivity improvements, workforce adaptability and stronger alignment between investment and skills development will be key to sustaining quality job creation over the medium term,” it said.
Moreover, HLIB Research similarly expects firm underlying labour demand, even as June’s flat employment growth points to greater caution among employers.
“Though heightened geopolitical tensions continued to cloud the outlook, we expect continued export activity, sustained domestic demand and supportive fiscal policies to continue underpinning the labour market,” it said.
Apex Securities Research, meanwhile, expects the lagged impact of elevated material and operating costs to become more pronounced in 2H26, potentially capping hiring demand.
Even so, it expects employment prospects to remain broadly intact and keeps its 2026 unemployment forecast at 3%.
BIMB Research also maintained its 2.9% forecast, noting that employment expanded 0.9% in 1H26 despite labour force growth moderating to 0.8%.
The number of unemployed persons fell 2.9% during the period and is projected to decline 1.5% for the full year.
Recent official data show Malaysia’s unemployment rate held at 3% in June despite external headwinds, although the number of unemployed people rose for a fourth consecutive month to 517,800 from 513,400 in May, while active jobseekers increased to 410,900 from 408,000.
Meanwhile, one analyst said Malaysia’s labour market has shown resilience despite a more cautious hiring environment.
“While employers may take a more measured approach to recruitment, healthy labour demand should help keep unemployment low and support household spending through the year,” he explained.
