Malaysia’s labour force grows to 16.9mn in 2024, with unemployment easing to 3.2%

Youth unemployment, underemployment, and long-term jobless rates all improved last year, pointing to a steady labour market recovery.

Malaysia’s labour market continued to show encouraging signs of recovery in 2024, supported by ongoing economic growth. This is based on the Annual Statistics of the Labour Force, Malaysia, 2024 released by the Department of Statistics Malaysia (DOSM) on 30 June 2025.

The report noted that the unemployment rate dropped to 3.2% in 2024, a slight improvement from 3.3% in 2019 before the pandemic began. The number of unemployed persons also declined to 534,100, with the improvement largely driven by youth aged 15 to 24.

Labour force expands, participation rate reaches new peak

The total labour force increased by 3.3% to 16.9mn persons, an increase from 16.37mn in 2023. Alongside this growth, the Labour Force Participation Rate (LFPR) rose to a record high of 70.6% compared to 70% the year before.

The number of employed persons increased by 3.5% to 16.37mn persons, compared to 15.81mn in the previous year. As a result, the employment-to-population ratio improved to 68.4%, an increase from 67.7% in 2023.

In terms of employment status, the majority of working Malaysians, or 78.5%, were categorised as employees. This group totalled 12.86mn persons. Another 15.4%, or 2.52mn persons, were classified as own-account workers.

Most employed persons in semi-skilled roles, services sector still dominant

Semi-skilled jobs remained the largest occupation category, accounting for 56.5% of all employment or around 9.26mn persons. This was followed by skilled occupations at 30.2% (4.94mn persons), and low-skilled jobs at 13.3% (2.17mn persons).

Looking at sectors, employment remained heavily concentrated in the services sector, which employed 65.6% of the workforce. The manufacturing sector followed at 16.3%, while the agriculture sector accounted for 9.0%. The construction sector made up 8.5% of total employment, and the mining and quarrying sector had the smallest share at 0.5%.

Fewer Malaysians underemployed in 2024

Underemployment figures also improved. The number of people working fewer than 30 hours a week, either due to the nature of their job or lack of work, fell by 6.1% to 212,500 persons. The underemployment rate for this group dropped to 1.3% from 1.4% in the previous year.

Time-related underemployment, which also refers to those working fewer than 30 hours per week, declined by 9.1% to 125,100 persons. The rate decreased to 0.8% from 0.9% in 2023.

Skill-related underemployment, referring to individuals with tertiary education who are working in semi-skilled or low-skilled roles, posted a slightly lower rate of 36.1% compared to 36.3% in 2023. However, the total number of individuals in this group increased by 1.3% to 2.06mn persons.

Fewer unemployed overall, majority actively job hunting

The number of unemployed persons fell by 3.5% to 534,100 in 2024. Of this, 76.5% were actively unemployed, meaning they were available for work and actively seeking jobs. This group totalled 408,800 persons, which is 3.2% fewer than in the year before.

Among the actively unemployed, 62.8% had been jobless for less than three months, while 6.3% were in long-term unemployment, meaning they had been looking for work for more than a year.

The number of inactively unemployed, who are those that are not seeking work because they believe there are no suitable jobs, dropped by 4.4% to 125,300 persons compared to 131,100 persons in 2023.

Youth unemployment eases, adult jobless rate remains low

Youth unemployment, among those aged 15 to 24, decreased by 0.7 percentage points (p.p.) to 10.3%. The number of unemployed youths declined by 4.1% to 284,700 persons from 297,000 in 2023.

For adults aged 25 to 64, the unemployment rate dropped by 0.1 (p.p.) to 1.8%, while the number of unemployed persons in this age group fell by 2.8% to 249,400.

State level trends: Putrajaya leads in job creation and participation

Among the states, Putrajaya recorded the lowest unemployment rate at 1.1%. Melaka followed with 1.6%, while Pulau Pinang and Pahang each posted a rate of 2%.

Putrajaya also had the highest labour force participation rate at 78.7%. Selangor followed at 77.9%, Kuala Lumpur at 75.4%, and Pulau Pinang at 72.0%.

When it comes to women’s participation in the workforce, five states exceeded the national female LFPR of 56.5%. These were:

• Putrajaya (79.4%),
• Selangor (70.3%),
• Kuala Lumpur (66.6%),
• Melaka (58.4%), and
• Pulau Pinang (57.6%).

Skill mismatch varies across states

Six states recorded skill-related underemployment rates lower than the national average of 36.1%. Kuala Lumpur had the lowest at 18.6%, followed by Pulau Pinang (26.5%), Negeri Sembilan (31.3%), Putrajaya (32.1%), Johor (33.4%), and Perak (34.7%).

On the other hand, Kelantan had the highest rate of skill-related underemployment at 52.3%. Terengganu followed with 45.8%, and Pahang recorded 44.5%.

Slight rise in those outside the labour force

The number of persons outside the labour force increased slightly to 7.02mn in 2024. The majority of this group remained inactive due to housework or family responsibilities, which made up 43.1%. This was followed by those pursuing education or training, who made up 41.3%.

Labour market stable as Malaysia eyes moderate growth in 2025

Malaysia’s economy expanded more quickly in 2024, supported by strong domestic demand, household spending, and a recovery in exports. These factors contributed to better labour market conditions, with more people in employment and fewer looking for jobs.

Lead image / DOSM Facebook