A persistent increase in the labour force (+26.7k or +0.2% m/m) and hiring (+28.4k or +0.2% m/m) helped to keep the national unemployment rate steady at 3.5% in Apr for two consecutive months. Labour force participation rate hit another new record high of 70.0% in Apr (from 69.9% in Mar). 

All but the mining & quarrying sectors continued to employ more workers in Apr, led by the services industry. The employment-to-population ratio maintained at 67.5%, indicating strong ability of Malaysia’s economy to create employment.    

We reiterate our 2023 year-end unemployment rate projection of 3.2% (BNM est: 3.3%, end-2022: 3.6%), largely backed by the government’s ongoing efforts to create job opportunities via various initiatives including attracting high valueadded investments. Having said that, we also see rising downside risks to Malaysia’s labour market outlook lately following a weaker-than-expected economic growth recovery in China, more subdued external demand as a consequence of tighter global monetary and financial conditions, as well as softening commodity prices. This could lead to a delay in reaching fullemployment by year-end should global conditions worsen over the next couple of months.