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Continued growth in Malaysia's labour force in Q1 2023: Labour force statistics

Continued growth in Malaysia's labour force in Q1 2023: Labour force statistics

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The number of unemployed persons continued to decline as well, with a drop of 2.3% from the previous quarter.

Malaysia's labour force continued to expand in the first quarter of 2023, registering a total of 16.65mn persons. This was an increase of 0.6%, or 106,700 persons, from the last quarter (Q4 2022), which registered 16.54mn persons.

According to the Department of Statistics' (DOSM) Quarterly Principal Statistics of Labour Force, Q1 2023, a higher labour force participation rate (LFPR) was also recorded during the quarter at 69.8%, growing by 0.3p.p from 69.5% in the preceding quarter.

The employment-to-population ratio, which indicates the economy’s ability to create employment, further increased by 0.3p.p to reach 67.3%, according to the statistics (Q4 2022: 67%). At the same time, the number of outside labour force continued to drop, falling by 30,400 persons during the quarter, and eventually recording 7.22mn. For reference, Q4 2022 recorded 7.25mn persons.

A year-on-year comparison continued to reflect an upward trend in the labour force, adding 402,800 persons (Q1 2022mn persons). Similarly, the LFPR improved yearly by 0.8p.p, up from 69% in Q1 2022.

Employment figures

As shared by DOSM, the number of employed persons in Q1 of 2023 further increased, growing by 0.8% (or growth of 120,300 persons) to record 16.06mn persons from 15.94mn persons in Q4 2022. Compared on a yearly basis, the number of employed persons also grew by 3.1%, or equivalent to 487,100 persons, as compared to Q1 2022 (Q1 2022:15.57mn persons).

By age group, the number of employed persons was dominated by those aged 25 to 34 years, at 33.9%, comprising 5.45mn persons. This was then followed by those aged 35 to 44 years (25.6%; 4.12mn persons), and those aged 45 to 54 years (16.7%; 2.68mn persons).

Going deeper, all the categories of employment showed positive growth in the first quarter of 2023, except for unpaid family workers.

Meanwhile, the employee’s category which was the largest composition of employed persons went up by 0.5%, (54,600 persons) to mark 12.06mn persons in Q1 2023, up from 12mn persons in Q4 2022. Similarly, own-account workers continued to register a growth of 2% (57,700 persons) to record 2.94mn persons, along with the number of employers edging up by 1.7% (equivalent to 9,900 persons) to reach 581,700 persons (Q4 2022: 571,800 persons).

In terms of skill category, semi-skilled workers comprised the largest share with 59.3% (9.52mn persons), followed by skilled and low-skilled workers at 27.9% (4.49mn persons) and 12.8% (2.06mn persons) respectively.

Slight drop in the unemployment rate

The number of unemployed persons continued to decline in Q1 this year, with a drop of 2.3% (13,600 persons) to reach 586,900 persons (Q4 2022: 600,500 persons). In line with this trend, the unemployment rate during the quarter continued its downward trend as well, declining slightly to 3.5% compared to 3.6% in the previous quarter. On a year-on-year comparison, the unemployment rate also reduced by 0.6p.p (Q1 2022: 4.1%).

By category of unemployment, the actively unemployed, or those who were available for work and were actively seeking jobs, encompassed 84.5% of the total unemployed persons. This category fell by 19,600 persons, and reached a total of 495,800 persons from the previous quarter (Q4 2022: 85.8%; 515,400 persons).

Meanwhile, the inactively unemployed, or those who believed that there were no jobs available, continued to increase for the first quarter with an addition of 1.3p.p to record 15.5% — equivalent to 91,100 persons (Q4 2022: 14.2%; 85,000 persons).

Further analysing the duration of unemployment, the unemployed persons for less than three months comprised 63% of the total actively unemployed, whereas those who were in the long-term unemployment of more than a year were at 7.1% in the first quarter of 2023.

Lastly, the number of those outside the labour force continued to decrease by 0.4% (30,400 persons) in the first quarter of 2023, recording 7.22mn persons (Q4 2022: 7.25mn persons). In comparison with the same quarter of the preceding year, the number outside the labour force also dropped by 1% year-on-year to stand at 74,200 persons (Q1 2022: 7.29mn persons).

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Photo / Department of Statistics Malaysia

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