KUALA LUMPUR, Nov 23 -- The Institute of Labour Market Information and Analysis (ILMIA) is optimistic that the job market will be better in the fourth quarter of this year (Q4 2020) in Malaysia based on the improvement in job creation and the stable unemployment rate in Malaysia since Q3 2020.
ILMIA senior director Betty Hasan said as the government had introduced different types of Movement Control Order (MCO) such as the Enhanced MCO, Recovery MCO and Conditional MCO, there was no necessity for a nationwide lockdown and allow only essential services to operate like in the first MCO in March.
"Thus we feel that the outlook for Q4 will be better as the economy is recovering and we believe it is positive for Malaysia.
"The worst is behind us hopefully," she said during a webinar session organised by the EU-Malaysia Chamber of Commerce and Industry (EUROCHAM Malaysia) titled “Malaysia's Labour Market Outlook in the Time of COVID-19”, today.
Historically, Betty said the employment rate has remained stable with an average of three per cent for the past few years until 2019, indicating that Malaysia has a tight labour market and a continued demand for labour force.
However, the COVID-19 outbreak and the implementation of the MCO have negatively effected livelihood, businesses and the economy in general.
“The labour market started to feel the impact of the measures as the unemployment rate in April spiked to 5.1 per cent. This is the highest rate experienced in Malaysia since 1990.
“The increase in unemployment was due to a lack of job creation due to restricted economic activities and an increase in the number of retrenchments since Q2 this year,” she said.
In Q3 2020, she said the cumulative number of retrenched persons reached 83,717, over two times the total retrenched persons in the whole year of 2019 which was 40,084 persons.
In general, she said it was clear that decline in economic growth influences job creation. The economic indicator dropped significantly in Q1 and Q2 2020 to 0.7 per cent and -17.1 per cent respectively, according to statistics by the Department of Statistics Malaysia, ILMIA and Social Security Organisation.
Correspondingly, job vacancies depicted a declining pattern, dropping to 119,388 in Q1 2020 and further decreasing to 46,499 in Q2 2020.
“As the economy started showing signs of recovery, job vacancies increased rapidly in Q3, 2020, with 124,225 job vacancies registered, portraying a decline in the unemployment rate in the same period,” said Betty.
To mitigate the impact of COVID-19 on the labour market, Malaysia introduced a series of economic stimulus measures to maintain financial stability in the country, safeguard household economic welfare and help companies survive the crisis.
"The government allocated a total of RM302 billion in funds in the country in efforts to mitigate the labour market impact during COVID-19, with the major component of the stimulus package made up of labour market initiatives," she added.
The first was the Economic Stimulus Package (RM20 billion) announced on Feb 27, 2020; followed by PRIHATIN Economic Stimulus Package worth (RM250 billion) on March 27, 2020; National Economic Recovery Plan (PENJANA) (RM35 billion) on June 5, 2020; and National Economic Recovery Plan (Budget 2021) on Nov 6, 2020.
Meanwhile, EUROCHAM Malaysia chief executive officer Sven Schneider said the chamber is currently doing its own survey on how much European companies registered in Malaysia have benefited from the initiatives announced by the Malaysian government.
“Although we had experienced some complexities, confusion and different kinds of standard operating procedures (SOPs) to adhere to, we are seeing that the condition in Q3 is not as bad as during the lockdown,” he said.
On another note, its deputy chairman Luciano Pezzotta said as the COVID-19 continues to spread in Europe and the Americas, people have to learn to live with the virus, with appropriate measures and SOPs and being able to carry on doing business.
“Ultimately, if we continue to see the level of the virus spreading, consumer confidence would somehow be affected.
“But as we are hearing positive news about the vaccine and its effectiveness, we hope it can soon be ready to use. Therefore, I am optimistic that 2021 will be a much better year,” added Pezzotta.
Source: BERNAMA
