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MALAYSIA’S labour market is expected to remain firm throughout the year, with economists projecting continued low unemployment on the back of robust domestic demand, stable foreign investment and a steady influx of tourism-driven employment opportunities.
Kenanga Investment Bank said the country’s economy is likely to avoid a sharp slowdown, despite moderating growth, thanks to strong business investments and improving trade sentiment between the United States and China.
“Consumer spending remains firm, with steady household loan growth indicating healthy consumer confidence and spending capacity,” the research house noted.
Official data released on Wednesday by the Department of Statistics Malaysia showed the unemployment rate dropped to 3.0% in April – its lowest level since April 2015 – as more people entered the workforce and successfully secured employment.
Economists generally regard a 3% jobless rate as indicative of full employment.
BIMB Securities said the fall in unemployment, coupled with continued growth in the number of people employed, suggests a positive labour market trend.
However, the outlook is not without risks. Export-driven sectors, particularly in regions such as Penang and Johor, may come under pressure from persistent global trade tensions and looming US tariffs, potentially impacting jobs in electronics, machinery and intermediate goods manufacturing.
“Caution is warranted for export-oriented sectors, as elevated global tariffs may weigh on employment and wage growth,” BIMB said.
The firm also raised concerns over Malaysia’s persistent youth unemployment problem, noting that the jobless rate among those aged 15 to 24 remains elevated at over 10%. - June 12, 2025