MIDF Research expects Malaysia’s unemployment rate to be around 4.3 per cent in 2020 from 3.3 per cent last year as softer export growth in recent months will likely affect job outlook for the trade sector.
In a note, the research house said the rising number of Covid-19 infections in major export markets such as Europe, the United States and the United Kingdom could possibly hurt trade outlook and therefore hiring plans especially in the current quarter.
Furthermore, it said recovery in the labour market would take time to return to pre-pandemic levels.
“With the continued economic recovery, we have seen reopening of business activities and increasing labour demand that had led to the reduction in the unemployment rate from the high in May 2020.
“However, the recent resurgence of Covid-19 cases and the extension of targeted movement control order (MCO) until early Dec 2020 point towards a slower recovery in the labour market as we expect labour demand for the services sector, particularly hotel and restaurants, will once again weaken,” it said.
The Department of Statistics Malaysia today announced that unemployment rate rose slightly to 4.7 per cent in October 2020 compared with the recent peak of 5.3 per cent in May 2020 as businesses have gradually reopened following easing of MCO restrictions.
The current level of unemployment rate remained elevated compared to the pre-pandemic period (February 2020: 3.3 per cent) as firms were yet to run at full capacity. — BERNAMA