Monday’s report on employment shows Malaysia’s labour market shedding 200k jobs (‘000):
Looking at the chart above, I can’t help but think this is just statistical noise – the change in employment series looks suspiciously regular. The feeling I get from this has been made even stronger because of the lack of breakdown in the monthly employment and labour force data. In that sense, the quarterly employment surveys might be a more accurate reflection of the actual state of the labour market.
Having said that, I appreciate having a monthly series to look at, even if it is “noisy”.
Back to the August data: while jobs have been “lost”, the work force itself also shrank by an even bigger number, leading to a dropping unemployment rate:
That’s a record low I believe, even looking at the quarterly series (which goes back a couple of decades). I don’t know about you, but 2.7% signals to me that the economy is at least roaring along at full capacity, if not above it.
If you’re not feeling it, I’m not really surprised however – much like Australia’s two-speed economy where mining is leading the way, in Malaysia the spate of infrastructure and commercial development means construction and related services are the one’s booming. Manufacturing right now, while not precisely drowning, is at best treading water.
Technical Notes:
August 2012 Employment Report from the Department of Statistics (warning: pdf link)
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I think the low labour force participation rate is the most worrying. Our LFPR is the lowest in the region (ASEAN), mainly due to the ultra low female LFPR and made worse by our low retirement age.
ReplyDeleteBecause of this, I would consider Malaysia's unemployment rate artificially low. For the sake of long-term productivity, we need to tap into this hugely untapped able-bodied people.
@Shihong,
ReplyDeleteIt's partly a generational thing. If you look at the LFPR by age, its near "normal" for females in the 20-30 age cohorts, but drops off sharply for older women.