Labour market better in Q3 as rehiring resumes - BNM

Bank Negara Malaysia Deputy Governor Jessica Chew said the re-opening of the economy post-Movement Control Order (MCO) and the recovery in external demand has led to greater rehiring activities in Q3.

She said for every 100 job losses, there are now 22 job placements, compared to nine job placements for every 100 job losses in Q2.

“Of course there are sectors in which the prospects of recovery in employment and income is a bit more challenging, for example, the tourism-related industry, but the unemployment rate has also improved to 4.7 per cent in July.

“These are signs that the labour market condition is improving and this is expected to be sustained in Q4 2020 as economic activities continue to normalise,” she said during a virtual briefing to business editors in conjunction with the publication of the first half (1H) 2020 financial stability review released today.

Chew said the rate subsidy and programmes introduced by the government are crucial at this point of time to safeguard the labour market conditions.

Additionally, she said the banks’ measures, including the targeted loan moratorium and support from stimulus measures, are expected to continue into 2021.

In July, the government announced an extension of the moratorium and targeted bank assistance, which it hopes would benefit three million individuals, as well as small and medium-sized enterprises.

As of Sept 11, banking institutions have engaged with more than 1.4 million borrowers, whereupon more than 380,000 borrowers confirmed that they were in need of the assistance.

Chew said that 98 per cent of the applications for the moratorium extension and targeted bank assistance have been approved.

“We had earlier identified three million borrowers (from various sectors) as vulnerable, but clearly not all borrowers within the sectors are in need of assistance.

“Some people are still struggling, but at the same time, we also starting to see customers making their repayments which becomes due in October,” she said, adding that the number is now approaching 70 per cent of the pre-moratorium level.

On Tuesday, the Statistics Department announced that the country’s unemployment rate remained at 4.7 per cent in August 2020.

The number of unemployed persons had marginally decreased by 3,500 persons to 741,600 during the month compared to July.