Robust GDP Expansion amid Strong Job Growth in 3QCY22

Labour force and employment continued expanding +2.9%yoy and +3.8%yoy respectively, supported by robust domestic economic growth and upbeat external front.

Robust GDP Expansion amid Strong Job Growth in 3QCY22
Robust GDP Expansion amid Strong Job Growth - Photo by Muhammad Akhir / Unsplash

Continued recovery of Malaysia’s labour market as jobless rate touched a new pandemic low at 3.6% in Sep-22. Youth aged 15~24 unemployment rate still at double-digit rate of 12.1%, more than two-year low but remained higher than pre-pandemic (2019: 10.4%).

Labour force and employment continued expanding +2.9%yoy and +3.8%yoy respectively, supported by robust domestic economic growth and upbeat external front.

Labour market to benefit from the expected-expansionary fiscal policy in post-GE15. Moving forward, we opine Malaysia’s labour market to stay in recovery trend as indicated by job-vacancy rate 56% in Aug-22.

"With this upbeat labour market performances, we are optimistic of a stronger consumer spending in 2HCY22 onwards," says MIDF.

Malaysia’s average unemployment rate forecast at 3.8% for 2022. Labour market in Malaysia is expected to strengthen further in 4QCY22 underpinned by upbeat momentum in domestic economy and steady expansion in external sector.

Underpinned by domestic reopening and strong economic fundamentals, Malaysia’s unemployment rate is projected to trend lower this year to 3.8% in 2022 (2021: 4.5%).

IPI Points to Faster GDP Growth in 3QCY22

IPI maintained double-digit growth in Sep-22. Malaysia’s IPI growth maintained double-digit expansion for the fourth straight month in Sep-22, albeit at relatively slower pace of +10.8%yoy.

While the moderation tracks the moderate growth in manufacturing and electricity output, mining output recorded firmer growth (+15%yoy), driven by sustained growth in crude oil production and stronger LNG output.

Manufacturing sales reached new monthly high in Sep-22. Manufacturing sales recorded sustained double-digit growth of +19.5%yoy in Sep-22 (Aug-22: +24.4%yoy), with the value of manufacturing sales reaching new monthly high at RM161.7b.

Maintain IPI growth forecast for 2022 at +6%. Although growing exports and domestic consumption will be positive for IPI outlook, we keep our projection for 2022 IPI growth unchanged at +6% in view of uncertainties from external developments.

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