Higher employment rate implies economic recovery: Affin Hwang

KUALA LUMPUR: The sustained improvement in the labour market reflects the ongoing gradual pickup in economic activity, Affin Hwang Capital said.

Citing an example, Affin Hwang said new business registrations continued to increase from a low of 1,900 in April to 49,700 in October.

Besides that, Social Security Organisation’s (Socso) loss of employment (LOE) or retrenchment data has fallen for four consecutive months in October to 7,310 from 7,390 in September, its lowest level since April 2020.

“In the coming months, we believe sustained recovery in labour market conditions to continue and be supported by ongoing stimulus packages,” it said in a report today.

Affin Hwang said in addition, recent measures announced in 2021 Budget to support the labour market such as the extension of the wage subsidy programme for three months specifically for the tourism sector, would also underpin labour market conditions.

Yesterday, chief statistician Datuk Seri Mohd Uzir Mahidin announced that Malaysia’s unemployment rate improved 0.1 percentage points to 4.6 per cent in September from 4.7 per cent August.

The number of unemployed persons fell for the fourth consecutive month by 4,100, from a decline of 3,500 in August.

The cumulative number of unemployed persons fell to 737,500 from 741,600 in August.

Besides that, the labour force rose by 35,500 to 15.93 million persons, increasing for the fifth month in a row.

However, Affin Hwang said there were still some downside risks on economic activity, which may impact on labour market, especially following the recent extension of the conditional Movement Control Order (CMCO) from November 9 to December 6 for all states in Peninsular Malaysia with the exception of Perlis, Pahang and Kelantan.

As most essential services and business activities are allowed to operate, with restrictions mainly on non- essential services, the negative impact on domestic demand may not be as sharp as in the second quarter of 2020.

Affin Hwang has maintained its projection for the country’s unemployment rate to average around 4.5-4.7 per cent for 2020 from 3.3 per cent in 2019.

Source: NST