THE CONTINOUS RESUMPTION OF ECONOMIC ACTIVITIES LEAD THE LABOUR FORCE SITUATION TO REMAIN STABLE IN OCTOBER 2021 RECORDING THE HIGHER NUMBER OF EMPLOYMENT WHILE UNEMPLOYMENT DIPPED TO THE LOWEST RATE SINCE APRIL 2020
In October 2021, most of the states had moved into Phase 4 of the National Recovery Plan (NRP) except for Kedah, Kelantan, Pulau Pinang, Perak, Perlis, Sabah and Sarawak following the overall vaccination rate reaching 74.9 per cent while adults were 95.5 per cent as of 31 October 2021 . Besides, the number of daily COVID-19 cases also have reduced to four digits as compared to five digits in the previous month, whereas the number of admissions to Intensive Care Units declined. These good headways have steered further resumption of economic activities including the permission of inter-state travel. In addition, more domestic tourist destinations are opened to fully-vaccinated individuals, hence fostering more travelling and domestic tourism activities during the month.
Apart from that, social activities such as festivities, weddings, anniversary or birthday celebrations, reunions, retreats and other social functions are allowed for individuals who have completed vaccine with a capacity up to 50 per cent. In the meantime, spa business operations, wellness centres and health massage are allowed for fully-vaccinated operators and visitors by appointment. Besides, all schools and educational institutions under the Ministry of Education (MOE) and registered educational institutions were opened with the admission of students in stages starting from 3 October 2021 subject to the MOE's rules and regulation. Additionally, religious activities as well as all outdoor sports and recreation activities with no physical contact including recreational fishing, picnic and camping activities also were allowed in compliance to standard operating procedures (SOPs). The Creative Industry activities such as broadcasting and filming as well as entertainment activities including cinemas, theatres and musical were resumed, restricted to fully-vaccinated individuals.
Therefore, the continuous resumption of more economic and social & recreation activities led the labour force situation to remain stable in October 2021. This was reflected by the higher number of employment during the month while unemployment dipped to the lowest rate since April 2020. In the meantime, the Leading Index (LI) further improved by 4.0 per cent month-on-month (August 2021: 1.1%), thus anticipating a healthier economic prospect in the near future. As of the monthly external trade indicators, both exports and imports continued to register a month-on-month positive growths of 3.2 per cent (September 2021: 16.0%) and 4.1 per cent (September 2021: 14.2%) respectively.
The Labour Force Report for October 2021 describes the labour supply situation as the country entered the various phases of the NRP. The report also elaborates on the month-on-month changes to examine the immediate effects of the NRP to rejuvenate the economy while containing the spread of COVID-19. Users are advised to interpret the monthly statistics with caution since they are non-seasonally adjusted. In addition, annual changes from the same month of the previous year are also reported.
The upward trend of employed persons persisted during October 2021
The upward trend of employed persons persisted during October 2021 by registering an addition of 0.6 per cent month-on-month or 91.1 thousand persons to 15.55 million persons (September 2021: 15.46 million persons). Likewise, the number of employed persons held steady year-on-year with an increase of 347.5 thousand persons or 2.3 per cent (October 2020: 15.21 million persons).
In terms of employment by economic sector, the number of employed persons in Services sector continued to trend up particularly in Wholesale and retail trade; Food & beverages services; Information & communication and Transport & storage activities. Similarly, the employment in Manufacturing and Construction sectors remained positive for the third month whereas Agriculture and Mining & Quarrying sectors were still on a decreasing trend.
During the month, the employment-to-population ratio which indicates the ability of an economy to create employment went up by 0.3 percentage points to record 65.8 per cent (September 2021: 65.5%). As for the year-on-year comparison, the ratio rose by 0.5 percentage points (October 2020: 65.3%). [Chart 1]
Chart 1: Employed persons and employment-to-population ratio, January 2018 - October 2021
The employees’ category which made up 77.0 per cent of total employed persons, sustained the positive growth in October 2021 by 0.4 per cent (+45.3 thousand persons) as compared to September 2021 to register 11.97 million persons (September 2021: 11.93 million persons). Likewise, the own-account workers category which consists mostly of daily income earners working as small business operators such as small retailers; hawkers; sellers in markets and stalls; as well as smallholders risen by 1.4 per cent or 35.4 thousand persons to 2.61 million persons (September 2021: 2.57 million persons). The encouraging month-on-month changes in both employment categories reflected the positive impact of the resumption of economic activities and the lifting of the inter-state travel ban during the month. [Chart 2]
Chart 2: Employed person by status in employment, September and October 2021
In October 2021, the number of employed persons who were temporarily not working declined further to 122.7 thousand persons as against to 380.7 thousand persons in the previous month. Similar trend was observed when comparing with the same month of the previous year, whereby this category recorded a reduction of 61.0 thousand persons (September 2020: 450.6 thousand persons). This group of persons, who were most likely not able to work was not categorised as unemployed as they had work to return to.
Unemployment dipped to the lowest rate since April 2020
In October 2021, unemployment dipped to the lowest rate since April 2020 to record 4.3 per cent (September 2021: 4.5%). The number of unemployed persons continued to lessen month-on-month by 3.4 per cent (-24.7 thousand persons) recording 705.0 thousand unemployed persons (September 2021: 729.6 thousand persons). Although the number of unemployed persons was on a declining trend, it remained relatively higher than the pre-pandemic period.
In comparison with a year before, the unemployment rate also lowered by 0.4 percentage points (October 2020: 4.7%) with the number of unemployed persons edged down by 5.8 per cent or 43.2 thousand persons (October 2020: 748.2 thousand persons). [Chart 3]
Chart 3: Unemployed persons and unemployment rate, 1982 - 2020 and January 2020 - October 2021
From the total number of unemployed persons during the month, 83.6 per cent were the actively unemployed or those who were available for work and were actively seeking jobs. This group recorded a decrease of 3.5 per cent or 21.4 thousand persons to 589.5 thousand persons (September 2021: 611.0 thousand persons). In terms of the duration of the unemployment, the unemployed persons for less than three months encompassed 55.5 per cent while those who were in long-term unemployment of more than a year was 7.8 per cent. As for the inactively unemployed who believed that there were no jobs available, it decreased by 2.7 per cent or 3.2 thousand persons to record 115.4 thousand persons (September 2021: 118.7 thousand persons). [Chart 4]
Chart 4: Unemployed category and duration of unemployment, September and October 2021
The youth unemployment rate for aged 15 to 24 years in October 2021 was 13.9 per cent, remained unchanged for the third month. In terms of number, the unemployed youths were added by 23.7 thousand persons (+6.6%) to 358.8 thousand persons (September 2021: 335.1 thousand persons). Nevertheless, the unemployment rate for youth aged 15 to 30 years recorded a fall of 0.4 percentage points month-on-month to 8.1 per cent (September 2021: 8.5%). [Chart 5]
Chart 5: Unemployment rate by selected age groups, 1982 - 2020 and January 2020 - October 2021
LFPR stepped up further to 68.8 per cent in October 2021
During the month, the number of labour force gained by 0.4 per cent or equivalent to 66.5 thousand persons to 16.26 million persons (September 2021: 16.19 million persons). Accordingly, the labour force participation rate (LFPR) stepped up further to 68.8 per cent, with an increase of 0.2 percentage points (September 2021: 68.6%).
Similar trend was observed on year-on-year basis whereby the number of labour force rose by 1.9 per cent or with an addition of 304.3 thousand persons (October 2020: 15.96 million persons). In the meantime, the LFPR increased by 0.3 percentage points as compared to 68.5 per cent in October 2020. [Chart 6]
Chart 6: Labour force and LFPR, 1982 - 2020 and January 2020 - October 2021
Analysing further of the labour force indicator for October 2021, the number of male labour force ascended to 9.99 million persons (September 2021: 9.95 million persons) while the female labour force climbed to 6.26 million persons (September 2021: 6.25 million persons). Consequently, both male and female LFPR remains elevated as against the previous month with male LFPR increased to 81.5 per cent (September 2021: 81.2%) while female LFPR went up to 55.2 per cent (September 2021: 55.0%). Year-on-year comparison, male LFPR was higher by 0.8 percentage points (October 2020: 80.7%) whereas female LFPR remained unchanged at 55.2 per cent in October 2020. [Chart 7]
Chart 7: Labour force and LFPR by sex, 1982 - 2020 and January 2020 - October 2021
The largest composition of outside labour force was due to schooling/ training
In October 2021, the number of outside labour force or also known as inactivity group decreased by 41.4 thousand persons (-0.6%) to 7.36 million persons (September 2021: 7.41 million persons). As compared to October last year, this inactivity group was higher by 16.8 thousand persons (+0.2%) from 7.35 million persons. The largest composition of outside labour force was due to schooling/ training which comprised of 42.6 per cent and followed by housework/ family responsibilities category with a share of 40.7 per cent. [Chart 8]
Chart 8: Share of outside labour force by reasons for not seeking work, September and October 2021
Through the Wage Subsidy Programme (PSU) 1.0 under the PRIHATIN Packages which aimed to ensure employees are able to retain their jobs, a total of 322,177 employers and 2.64 million registered employees were benefitted with an approved value reaching RM12.95 billion as of 29 October 2021. In addition, a total of RM1.40 billion has been channelled to 80,934 employers to retain 713,820 employees through the PSU 2.0 under the KITA PRIHATIN Packages which was designed to further support the employers and employees. Next, a total RM3.32 billion had been spent to maintain 1.51 million employees through the PSU 3.0. Besides, under PSU 4.0, there were RM 1.54 million was distributed to 119,904 employers to continue their operation and to retain 1.42 million employees. As of 12 November 2021, under the Hiring Incentive Programme and Training Assistance, a total of 137,659 employees were hired particularly in the Manufacturing and Wholesale and retail trade industries. Later, through the Reskilling and Upskilling Programme which meant to assist jobseekers specifically youths, a total of 150,908 individuals were accepted to be took part in the programmes.
Furthermore, the Government had also initiated the Recruitment Incentive Programme (PenjanaKerjaya) under the Social Security Organisation (SOCSO) which aimed to encourage employers to recruit and train the employees. Under this initiative, a total of RM1.5 billion was allocated for PenjanaKerjaya 1.0 whereby as of 3 November 2021, a total of RM639.30 million was provided to 15,097 employers and 116,316 employees. Next, under the PenjanaKerjaya 2.0 with an allocation of RM2 billion, a total of RM544.99 million had been channelled to benefit 16,625 employers and 138,298 employees. On top of that, through the PenjanaKerjaya 3.0, there were 5,604 employers and 16,956 employees were benefitted involving a total value of RM38.10 million funds. In total, the Government has channelled RM1.22 billion to 37,326 employers through the PenjanaKerjaya to retain 271,570 local employees. Moreover, through the Short-Term Employment Programme (MYStep), a total of 58,159 employees had been recruited. As of 12 November 2021, out of this total, there were 41,135 employees were recruited in the public sector whereas 17,024 employees were positioned in the GLCs and their strategic partners.
In addition, through the Career Advancement Programme (KPT-CAP) which was one of the efforts to address the issue of the unemployed graduates, has managed to assist 17,185 unemployed graduates to secure jobs. Also, the National Apprenticeship Scheme (SPN) under the Ministry of Youth and Sport and in collaboration with other ministries such as the Ministry of Works, Ministry of Human Resources and federal agencies under the three ministries, aimed to provide job opportunities to youth as apprentices in various companies and organisations as well as providing a support system for youths to gain experience and enhancing their knowledge and skills through soft-skill training and on-the-job training. This programme has successfully aided 7,423 youths to secure jobs as of 15 November 2021. Meanwhile, the Professional Training and Education for Growing Entrepreneurs (PROTEGE) under the Ministry of Entrepreneur and Cooperative Development (MEDAC) was designed to implement the marketability enhancement programmes and inculcate entrepreneurial skills among the graduates. As of 12 November 2021, a total of 3,082 graduates have succeeded to be positioned in the PROTEGE Ready-to-Work programme.
To empower the businesses, through the Small, Medium Enterprise (SMEs) Soft Loan Funds by Bank Negara Malaysia (BNM) which comprised of Special Relief Facility (SRF); Automation & Digitalisation Facility (ADF); All-Economic Sector Facility (AES); and Agrofood Facility (AF) funds, there were 26,369 SMEs were benefitted with a total value of RM12.59 billion. Besides, under the Danajamin Prihatin Guarantee Scheme (DPGS) which focused on the viable businesses in all sectors facing difficulties due to COVID-19, a total of RM2.04 billion of total guarantees had been approved to 57 companies from 87 companies applying for the guarantees. Moreover, a total of RM67.5 million was approved for 340 applications through the PENJANA Tourism Financing which was specifically allocated for Bumiputera SMEs to support SMEs and micro-SMEs which were still affected by the COVID-19 pandemic. Meanwhile, through the Indian Community Entrepreneur Development Scheme (SPUMI) which was a strategic initiative under TEKUN designed to assist the Indian community in enhancing their economy by involvement in business and entrepreneurship, a total of RM20.61 million was funded to assist 887 Micro SMEs. To support the Agriculture and Food Industries, a total of 19,381 Agricultural Micro SMEs was assisted involving a total of RM241.17 million under the Agrobank Microcredit Financing Scheme.
Additionally, a total of RM86.60 million in the form of grants and loans for digitalisation services subscriptions was channelled to 13,889 businesses to support and encourage SMEs and Mid-tier Companies (MTCs) to digitalise their operations and trade channels. Next, the SMEs Digitalisation Grant through Bank Simpanan Nasional which aimed to support SMEs in adopting digitalisation in business operations, a total of RM124.88 million was funded to 45,333 SMEs in the form of matching grants as of 12 November 2021. Also, through the CENDANA initiative which designed to support the Arts, Culture and Entertainment sector, a total of RM5.85 million was allocated to 554 recipients including artists and organisations who were actively involved in the Malaysian arts and culture industry. Furthermore, under the Mudah Jaya Financing Scheme for Private Institute of Higher Learning (SPiM Penjana IPTS) by Majlis Amanah Rakyat (MARA) which focused to support the Bumiputera IPTS which was affected by the COVID-19 pandemic to cover their working capital, a total RM152.3 million was channelled to 22 Bumiputera IPTS.
Approaching the third-year of the COVID-19 pandemic, the battle persisted in ensuring that each layer of the society was protected. As the economy was impacted, the labour market also has no exception in dealing with the uncertainties throughout the period of which some may have adapted to the new norm while others are still struggling to find their ways to sustain in the market. In this regard, it was observed that active Government interventions played an important role in assisting the affected groups.
The implementation of the NRP has accelerated the vaccination process reaching 78.0 percent of the overall Malaysia’s population as of 7 December 2021, with adults achieving 97.1 per cent while youth was at 86.6 per cent . In line with this, most of the states were shifted to Phase 4 of the NRP, thus enabling more economic and social & recreational activities to resume. Furthermore, the relaxation of the inter-state travel is anticipated to bring a positive influence to the domestic tourism-related industry including arts, entertainment & recreational and transportation activities to regain the business momentum. With these positive progresses, may steer the recovery process of the economy in the upcoming months, not considering the new and more lethal COVID-19 variants. Additionally, through the Budget 2022 which also focuses on rejuvenating the labour market, among others by restoring business capabilities, generating and retaining jobs as well as increase social protection, may support the businesses as well as employees, hence accelerating the recovery of the labour market.
Moreover, a better economic outlook is also anticipated in the upcoming months indicating by a stronger growth of LI as against the previous month. Similarly, a positive business situation is foreseen for the six months ahead as reported in the Business Tendency Statistics.
The survey population cover persons who live in private living quarters and excludes persons residing in institutions such as hotels, hostels, hospitals, prisons, boarding houses and workers residing in construction work site.
The survey comprises of the economically active and inactive population. To measure the economically active population, the LFS uses the age limit of 15 to 64 years. The economically active population comprises of those employed and unemployed whereas those who are inactive is classified as outside the labour force.
LFS uses the actual status approach, where a person is classified on the basis of his labour force activity during the reference week.
All persons not classified as employed or unemployed as stated above are classified as outside labour force. Includes housewives, students (including those going for further studies), retired, disabled persons and those not interested in looking for a job.
The economic activity of a population depends on the demographic characteristics of that population. The proportion of economically active population, therefore, differs between sub-groups of that population. These variations are measured by specific activity rates termed as labour force participation rate. Labour force participation rate is defined as the ratio of the labour force to the working age population (15 to 64 years), expressed as percentage.
Population by characteristics of age group, ethnicity and state were used as benchmarks to produce labour statistics.
Starting with the monthly release of the Principal Statistics of Labour Force, Malaysia, January 2016, the principal statistics of labour is estimated based on the current population estimates as compared to the previous series which used population projections based on the Population and Housing Census of Malaysia, 2010. This rebase is to obtain statistics that is more consistent with current population structure.
For more details, please refer to the Department’s portal: www.dosm.gov.my
DATO' SRI DR. MOHD UZIR MAHIDIN
CHIEF STATISTICIAN MALAYSIA
DEPARTMENT OF STATISTICS, MALAYSIA
8 December 2021
Mohd Yusrizal bin Ab. Razak
Public Relation Officer
Strategic Communication and International Division
Department of Statistics, Malaysia
Tel : +603-8885 7942
Fax : +603-8888 9248
Email : firstname.lastname@example.org