Unemployment rate soars to 5pct, exceeds annual average in last 30 years

Malaysia's monthly unemployment for April soared to five percent, exceeding the annual average in the last 30 years.

According to the Department of Statistics' Key Statistics of Labour Force for April published today, the number of people out of a job increased by 48.8 percent to 778,800 people compared to a year ago.

The country's chief statistician Mohd Uzir Mahidin (above), in a statement, attributed the spike to the Covid-19 pandemic.

"The closure of operations for most of the businesses during movement control order (MCO) which had been extended to April 2020 has impacted loss of employment and jobseekers could hardly find jobs," he said.

The survey found the number of employed persons fell by 156,400 to 14.93 million in April compared to a year ago.

The decrease was by 299,000 employees when compared to March when 15.23 million people were employed.

The hardest hit, it said, were the manufacturing and services sectors, primarily in food and beverages, arts, entertainment, recreation and other services such as beauty centres and salons.

Furthermore, it said 2.59 million own account workers, mostly comprising small traders, smallholders and tour operators, were also affected by job losses due to the MCO.

"From the survey, MCO has affected 4.87 million employed persons who were not working in April 2020. However, this group of people was not categorised as unemployed as they have work to return to," it said.

Uzir said the trend is likely to remain when the statistics for May is released.

"In overall, all sectors of the economy were affected during Phase 2 and 3 of MCO in April 2020 especially for the non-essential services.

"Malaysia’s labour market in May is expected to be further affected following the conditional MCO starting May 5, as businesses were still not fully in operation.

"During this period, companies will have the tendency to reduce the size of their employees to ease the burden of the operating costs despite a predicted decline in their business revenue," he said.

However, he said the recovery MCO which kicked off on June 10, which saw the reactivation of most businesses, will help to spur the job market.

The last time Malaysia recorded an annual unemployment rate of five percent or higher was in 1990.

The unemployment rate of five percent is only for April but it will impact the final average. The unemployment rate in March was at 3.9 percent.

The annual unemployment rate for 2019 was at 3.4 percent.

- Mkini