Malaysia unemployment rate rises to 5.3 per cent in May

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the unemployment rate further escalated 0.3 percentage points month-on-month to 5.3 per cent as the number of unemployed persons went up by 47,300 to 826,100 persons.

However, he said the monthly change of unemployed persons in May 2020 was much lower than the change registered from March to April of 168,300.

"The reduction could partly be due to the implementation of numerous stimulus package reaching its intended target in addition to more businesses allowed to operate following the Conditional Movement Control Order (MCO) during the month," he said in a statement today.

Mohd Uzir said the number of employed persons who were temporarily not working had reduced more than half to 2.27 million in May this year, compared to 4.87 million recorded in April 2020.

"This group of people, who were most likely not able to work from home was not categorised as unemployed as they had work to return to," he said.

Of the total labour force in May 2020, he said employed persons recorded a marginal decline of 0.3 per cent to 14.89 million persons.

In line with this, he said employment-to-population ratio, which provides information on the ability of an economy to create employment, dropped further by 0.4 percentage points to 64.4 per cent.

"During the month, among the affected employed persons were in the services sector, mainly industries related to tourism, accommodation, event planning, arts and entertainment, sports and recreational activities, as well as other services," he said.

As the health authority increased detection of COVID-19 clusters among foreign workers, he said noticeable decline was also observed for employed persons in the construction sector.

Mohd Uzir said own-account workers continued to decrease since March, and in May, the group accounted for 2.42 million persons, a drop of 161,500 persons as against the previous month.

"Most are daily wage earners working in the farmer's market, night markets and stalls, freelancers, as well as smallholders.

"As the Conditional MCO still restricted their business operation to run as usual, this group of workers were and may continue to be at high risk of job and income losses," he added.

Meanwhile, the Labour Force Participation Rate in May 2020 stood at 68.1 per cent, registering a decline of 0.1 percentage point month-on-month as outflows into outside labour force continued to increase.

Outside labour force in May increased 0.6 per cent, recording inflows of 47,000 persons as against 105,300 in the previous month.

"This brought the total number to 7.39 million persons. The largest share of 43.4 per cent was outside labour force due to housework or family responsibilities, followed by a share of 39.1 per cent who were schooling," he said.

Mohd Uzir said the economic indicators for May 2020 showed improvement as compared to the previous month and these signalled that the economy was gradually improving.

"Following this, despite the continuous negative trend in the labour supply up to May 2020, this situation had improved considerably as compared to the previous month.

"It is expected that as the Recovery MCO which took effect on June 10 onwards, the business conditions would gradually recover as more sectors are allowed to open with strict standard operating procedures. This in turn is expected to retain employment, create new jobs and spur hiring," he added.