Malaysia's labour force in May 2023: Employment, unemployment rate, and more

Overall, Malaysia’s average unemployment rate is expected to decline further to 3.5% in 2023 and return to pre-pandemic levels (3.3%) in 2024.

Malaysia saw a steady increase in the number of employed persons for the month of May 2023, at a rise of 0.2%, or equivalent to 28,100 persons. This brought the total to a record of 16.28mn persons from 16.25mn persons in April 2023.

Meanwhile, the employment-to-population ratio, which indicates the ability of an economy to create employment, also rose 0.1 percentage points (pp) for the month, to reach 67.6% as compared to the previous month (67.5% in April 2023).

By economic sector, employed persons in the services sector continued to register a positive trend, particularly in:

• Food & beverage services;
• Wholesale & retail trade, and
• Information & communication activities. 

Similar trends in employment were also observed in the manufacturing, construction, mining & quarrying, and agriculture sectors.

Out of the total employed persons overall, the largest composition was the employees’ category with 75.5%, which saw a rise of 0.1% (11,600 persons) to 12.29mn persons in May 2023 as compared to the previous month (April 2023: 12.28mn persons).

Meanwhile, the number of employed persons who were temporarily not working reduced by 5.3% (4,600 persons), to register 81,900 persons from April 2023 (86,500 persons). On a year-on-year basis, this category decreased by 12.9% (12,100 persons) from 94,100 persons recorded in May 2022. For clarity , DOSM did not classify this group of persons, who were most likely not able to work temporarily, as unemployed as they have work to return to.

At the same time, the number of unemployed persons continued to decline in May 2023, with a drop of 0.4%, 2,300 persons, to 584,600 persons. For comparison, April 2023 recorded 586,900 persons.

Overall, the unemployment rate stood at 3.5% during the month (April 2023: 3.5%). According to research by the Malaysian Industrial Development Finance (MIDF), Malaysia’s unemployment rate maintained at pandemic low 3.5% in May. Per the MIDF study, Malaysia’s average unemployment rate is expected to decline further to 3.5% in 2023 and return to pre-pandemic levels (3.3%) in 2024.

Labour force figures

The figures above contributed to a steady labour force — also recorded in the study, the labour force and employment continued expanding at an increase of 2% year-on-year and 2.4% y-o-y, respectively, supported by upbeat domestic economic momentum and expansionary external front.

The number of labour force continued to record an upward trend for the month of May, with an increase of 0.2%, which equivalent to 25,700 persons to reach 16.86mn persons (April 2023: 16.84mn persons). May’s labour force participation rate (LFPR) held steady at 70% (April 2023: 70.0%).

Meanwhile, the number of persons outside the labour force in May 2023, remained on a declining trend with a reduction of 0.02% (1,400 persons) to record 7.23mn persons (April 2023: 7.23mn persons). The major composition of the outside labour force was due to housework/ family responsibilities (43.7%), while schooling/ training ranked second with 40.2%.

Finally, the report also noted that job vacancies in Malaysia were at a 21-month low in May, registering below 200,000 for the first time since August 2021. As MIDF suggests, this possibly reflects the tightness of the job market, which it expects to moderate pace in employment growth in 2HCY23.

Still, the monthly average job vacancies remained above 200,000, continuing the post-pandemic trend (2021: 206,700, 2022: 396,100). 

Lead image / Labour Force Survey Report May 2023