Malaysia’s unemployment rate jumps in June, no thanks to total lockdown

AS Malaysia continues to endeavour in flattening the surge of COVID-19 cases, the country’s unemployment rate has climbed by 4.8% (May 2021: 4.5%) or 768,700 unemployed individuals in June – the first time in four months.

This was in tandem with the rise of new daily cases which resulted in the implementation of full movement control order (FMCO) during the month whereby only essential economy and services sectors were permitted to operate.

The permitted business activities encompassed food & beverages (F&B), utilities, security, health & medical care, transportation, banking, communications and essential construction activities.

Year-on-year (yoy), however, the unemployment rate edged down by 0.1 percentage point as compared to 4.9% in June 2020 while the number of unemployed persons lessened by 4,600 individuals (June 2020: 773,200 individuals).

“In addition, some of the labour force had moved into inactivity which led the number of labour force declining to 16.07 million individuals as compared 16.10 million in May 2021,” the Department of Statistics Malaysia (DOSM) pointed out in a statistics of labour force for June and 2Q 2021.

“This was the first decrease of labour force recorded since April 2020 when the pandemic hit the country. Accordingly, lower labour force participation rate (LFPR) was registered at 68.3% (May 2021: 68.5%).”

Elsewhere, employed individuals in June 2021 showed that all sectors registered declines in employment, with the services sector posting month-on-month decreases for the first time after 12 months of increases.

The reduction in was largely related to the accommodation and F&B services; real estate; and wholesale & retail trade activities.

By status of employment, the employee’s category (77.6%) was the largest composition reduced by 56,700 individuals (-0.5%) to 11.87 million individuals (May 2021: 11.93 million).

Meanwhile, own-account (self-employed) workers recorded an addition of 4,100 individuals to 2.5 million individuals (May 2021: 2.49 million).

In the meantime, following the implementation of the FMCO throughout June, the number of employed persons who were temporarily not working increased significantly by 661,400 individuals to 801,100 from May 2021 (139,600 individuals).

A similar situation was observed during the first implementation of MCO last year whereby the number of employed persons who were temporarily not working surged.

In terms of unemployment situation by state, the highest unemployment rate in 2Q 2021 was recorded in five states, namely Federal Territory of Labuan (8.8%), Sabah (8.7%), Perlis (5.3%), Kelantan (4.8%) and Selangor (4.4%).

Meanwhile, Penang (73.5%), Kuala Lumpur (73.4%), Selangor (74.9%), Sarawak (69.4%) and Sabah (66.7%) recorded higher labour force participation rate during the quarter. – Aug 9, 2021

By : Cheah Chor Sooi – FOCUS MALAYSIA

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