The first phase of Movement Control Order (MCO) was implemented in Malaysia, starting from 18th March 2020 as a first containment measure to curb the COVID-19 pandemic. Only essential businesses are allowed to open, while other non-essential industries were ordered to be shut down and no travel is permitted. Due to this, industries that highly involve human interactions bear the brunt more than the rest. After the first MCO, the country started seeing a decline for industries such as tourism, especially for transportation, accommodation, food and beverages, as well as the arts, entertainment and recreation sub-sectors. Some major parts of the economy including manufacturing and education services were restricted as well, thus affecting working hours and businesses revenue. Later, various phases of MCO such as Conditional MCO (CMCO) and Recovery MCO (RMCO) took place and during this time, most economic sectors came to resume with the condition of strict adherence to standard operating procedures (SOP).

With this situation, Malaysia’s labour market experienced an uncommon trend in 2020. The labour force slightly increased to 15.7 million people attributed by increasing number in unemployed while employment was dropped. The unemployment rate grew up to 4.5%, recorded the highest rate since 1993. The number of unemployed persons increased by more than 200 thousand persons as compared to the pre-crisis period. Meanwhile, the outside labour force rose by 1.7% to 7.2 million people due to various reasons such as schooling (include those going for further studies), family responsibilities, disability and retirement.

This means that the male labour force participation rate (LFPR) is 80.6% (9.6 million out of 11.9 million working-age males) while female LFPR is 55.3% (6.1 million out of 11.0 million working-age females).

In terms of employment by skill level, Malaysia’s share of skilled employment (those who are employed in managerial, professional or technician roles) is at 28.2%. Meanwhile, the share of semi-skill workers is at 59.9% and the share of low-skilled employment is at 11.9%.

On a positive note, the educational background of the labour force is improving. The share of the tertiary-educated labour force has increased from 29.6% in 2019 to 32.0% in 2020.

Although the number of COVID-19 daily cases continued to record a high number in 2021, there was some relaxation for businesses to operate with strict compliance to SOP. Thus, it is predictable that Malaysia’s economy and the labour market will be improved lightly in 2021 despite the ambiguity of the health crisis.

Source: Department of Statistics Malaysia