KUALA LUMPUR: While Malaysia's labour market has shown signs of improvement, more has to be done to accelerate the country's economic recovery so to create more jobs and achieve full employment, said Minister in the Prime Minister’s Department Mustapa Mohamed.
In a statement on Friday (Sep 11), the minister in-charge of economy said unemployment rate has dropped to 4.7 per cent in July, following the reopening of economic sectors in stages since May.
It was an improvement from the record high of 5.3 per cent in May.
Mr Mustapa added that since June, 28,200 more people were employed, leaving 745,100 people unemployed.
“The recovery of the labour market and economic activities is in line with the decision of the government to reopen the economic sectors in stages since May. This has allowed more businesses to operate since, and now almost all economic activities are in operation again. The economic stimulus packages have also helped.
“Although the labour market keeps improving as targeted, the government is aware that there are still 745,100 people unemployed, which is higher than the national average of 494,000 for the period of 2016 to 2019,” he said.
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Mr Mustapa added that an additional 104,300 people were also temporarily jobless as their jobs were terminated temporarily but clarified that they were not termed as unemployed as they still had their jobs and would return to work eventually.
He however explained that a majority of economic sectors currently showed an increase in labour usage since June, especially in the services, transport, information technology and communication sectors.
“The Industrial Production Index which includes three main sectors which are mining, manufacturing and electronics saw a 2.1 per cent growth in July,” he said.
Following an increase in the number of COVID-19 cases, Prime Minister Muhyiddin Yassin announced the first phase of the movement control order (MCO) which was enforced from Mar 18 to Mar 31.
In April, Mr Muhyiddin had shared that Malaysia lost RM2.4 billion (US$577 million) every single day the MCO was enforced. Then on May 4, the government announced the conditional MCO which allowed almost all economic sectors to operate with strict standard operating procedures.
Malaysia subsequently entered the recovery MCO phase from Jun 10 and it has been extended until Dec 31.
JOB MARKET NOW SAFE FROM WORST OF COVID-19
Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said that the country's job market seems to have survived the worst of the pandemic.
“Two months of moderation in the unemployment rate which is 4.7 per cent in July and 4.9 per cent in June suggest that the worst of the COVID-19 impact on the nation’s job markets is behind us.
“This improvement corroborates with the number of employment loss as reported in the Employment Insurance System, which has passed the peak recorded in June at 18,579 persons to 16,660 persons in July, followed by 9,261 in August and 2,886 as of Sep 9,” he told CNA.
He however added that though recovery was steadily happening, it would take some time before the labour market recovered fully.
“It takes some time before the labour market is anywhere near back to pre-pandemic level of 3.3 per cent,” said Mr Lee.