HLIB Research said the country’s labour market remained relatively insulated from external pressures.
PETALING JAYA: The labour market is expected to remain steady, buoyed by a resilient employment trend and policy support, even as global trade risks intensify, say economists.
They said sustained job creation and rising household incomes would continue to underpin domestic consumption, cushioning the economy against external uncertainties.
According to Hong Leong Investment Bank (HLIB) Research, the country’s labour market continued to demonstrate resilience against mounting external headwinds, suggesting that it remained relatively insulated from external pressures.
“Steady employment conditions, alongside accommodative government policies, are expected to provide additional support to household spending in the near term,” the research house added.
However, it said: “The global shift towards protectionist trade measures poses downside risks to overall growth, particularly for export-oriented sectors, with potential spillover effects on domestic demand.”
It maintained its 2025 gross domestic product (GDP) growth forecast at 4%.
TA Research noted that year-to-date, total employment averaged 16.8 million in the first half of 2025, an increase of 2.9% year-on-year (y-o-y). Unemployment averaged 527,200 persons, down 5.2% from the same period last year.
“We expect the unemployment rate to average around 3% this year,” it said.
It emphasised that a strong labour market is crucial to sustaining private consumption – the main engine of GDP.
It also highlighted structural improvements in job quality, stating that “rising household income and better job quality will help strengthen domestic demand and support more inclusive growth, aligned with the Madani Economy goals.”
Under the 13th Malaysia Plan, the government aimed to reduce foreign worker dependence from around 15% to 10% by 2030, and further to 5% by 2035, while creating 1.2 million new jobs in manufacturing and the digital economy.
Other targets include raising labour’s share of GDP and compensation of employees to 40% and achieving a 70% graduate job-match rate.
The Statistics Department reported that the labour market remained solid in June despite intensifying global trade tensions and an uncertain external environment.
The unemployment rate held steady at 3%, with the number of unemployed persons declining 6.3% y-o-y and 0.7% month-on-month.
Employment growth accelerated slightly to 3% y-o-y, with gains spread across all sectors – services, manufacturing, construction, mining and agriculture.
Within services, job gains were most pronounced in accommodation, food and beverage services, and the information and communication sector, reflecting firm tourism demand and digital activity.
The number of own account workers rose 0.6% month-on-month, while those temporarily not working fell to 90,100 persons. Active job seekers declined to 414,400 from 416,400 in May.
This broad-based hiring momentum, coupled with ongoing government initiatives, has kept the labour market on a firm footing despite a less favourable global trade backdrop.
