KUALA LUMPUR: The labour market in Malaysia is expected to strengthen further in 2024, backed by encouraging momentum in the domestic economy and recovery in external trade.
Malaysia's average unemployment rate is expected to maintain at 3.4 per cent in 2024, MIDF Research said in a note.
The firm added that the return of non-citizens workers is expected to boost overall employment and reduce the jobless rate.
"As of the third quarter of calendar year 2023 (3QCY23), non-citizens' employment is almost 0.8 per cent lower than pre-pandemic levels.
"The downside risks to Malaysia's labour market among others is lower-than-expected external trade recovery and nosedived of global commodity prices," it said.
MIDF Research also noted that Malaysia's job vacancies registered at 113,600 in November 2023, more than three-year low.
The firm said the moderation is expected given the surge in job vacancies after economic reopening in post-pandemic era.
"The monthly average job vacancies dipped below post-pandemic levels at 173,500 in the 11 months of calendar year 2023 compared to 206,700 in 2021 and 396,100 in 2022.
"As comparison, monthly average during 2010-2019 was lower at 114,000.
"We foresee average job vacancies to hover at 100,000 to 120,000 per month level for 2024 amid external trade recovery and resilient domestic demand," it added.
According to MIDF Research, Malaysia's labour market continued on an improving trend as unemployment rate maintained at post-pandemic low of 3.3 per cent in December 2023.
Overall 2023, the jobless rate averaged at 3.4 per cent.
Labour force and employment improved further by 2.0 per cent from 2.6 per cent in 2022 and 2.4 per cent from 3.5 per in 2022.
Unemployed persons declined by 8.1 per cent, while outside labour force fell by 0.5 per cent.
For youth aged 15 to 24, MIDF Research said the unemployment rate averaged at pandemic and post-pandemic low of 10.9 per cent in 2023.
By employment type, employee which made up about 75.4 per cent of the employment increased steadily by 1.4 per cent year-on-year (YoY) while employer and own-account-worker increased by 5.3 per cent YoY and 6.5 per cent YoY respectively in 2023.
Going forward, MIDF Research said the strengthening and healthier job market will further reinforce consumer consumption and support overall gross domestic product growth for 2024.