Unemployment falls for second month as labour market stays resilient

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MALAYSIA’S labour market remained firm in September. The unemployment rate held steady at 3.0%, as the number of unemployed fell for a second straight month to 518.6k. Active jobseekers also declined slightly to 413.6k.

Employment growth was unchanged at +0.2% month-on-month (MoM), driven by sustained hiring in the services sector, particularly wholesale & retail trade, accommodation & F&B as well as information & communication.

“Employment also increased across manufacturing, construction, mining and agriculture sectors. By employment status, the number of employers rose at a faster pace, while employees (+0.1%) and own-account workers (+0.4%) grew at a slower pace,” said APEX Securities. 

The labour force expanded by +0.2% MoM to 17.54m, with the participation rate steady at 70.9%. Heading into 2026, domestic demand should remain the key anchor for Malaysia’s economy. 

Hiring momentum in services, which accounts for nearly two-thirds of total employment, is expected to stay firm, supported by resilient consumer spending and steady investment flows amid ongoing policy support.

APEX project services gross domestic product (GDP) to grow around +5.0% year-on-year (YoY) in both 2025 and 2026.

Meanwhile, the export-oriented manufacturing sector has fared better than expected despite tariff concerns, with nominal exports rising +6.8% YoY in quarter three 2025 (3Q25). This should provide near-term support to employment. 

That said, some caution is warranted, as Malaysia’s October manufacturing PMI pointed to a marginal reduction in staffing, suggesting uneven hiring momentum within the broader sector.

“With the unemployment rate averaging 3.0% in 9M25, we maintain our 2025 forecast at 3.0%, consistent with full employment,” said APEX.

The resilient labour market should continue to support private consumption and overall growth, underpinning our unchanged GDP forecast of +4.5% for 2025 (2024: +5.1%). For 2026, GDP growth projection is maintained at +4.1%, while APEX introduces a new unemployment rate forecast of 3.1% as tariff effects become more apparent. —Nov 11, 2025

Main image: Pexels.com

 

The post Unemployment falls for second month as labour market stays resilient first appeared on Focus Malaysia.

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