KUALA LUMPUR (Jan 17): Strong export performances last year have contributed significantly towards strengthening Malaysia's labour market, said MIDF Amanah Investment Bank Bhd, after the government reported that the unemployment rate fell to a two-year low of 3.3% in November.

"Export growth in November, for instance, rose by 14.4% year-on-year (y-o-y), above market expectation. This is the 11th consecutive month of double-digit growth in export for 2017.

"Domestically, industrial production growth reached three-month high at 5% y-o-y while distributive trade maintained at 9% y-o-y growth in the same month," MIDF said in a report today.

According to the Statistics Department, employment increased 1.8% y-o-y in November as the labour force grew 1.7% y-o-y to 15.08 million — lower than the 2.2% rise in October.

"Hence, unemployment rate went down to two-year low at 3.3% underpinned by solid economic performance in 2017," said MIDF.

The research house said upbeat economic momentum in both domestic and external activities pushed growth in employment and overall labour force levels higher in November, outpacing unemployment growth for the ninth consecutive month since March 2017.

The number of persons employed as of November fell to 14.579 million versus 14.582 million in the same month last year, while the number of persons unemployed declined to 505,000 from 509,000 in September, according to the Statistics Department.

This comes as the global labour market continues to strengthen, where the unemployment rate in the US maintained at 4.1%, buoyed by global demand and high confidence among consumers and business, due to the prospects for tax cuts. Over in Europe, the unemployment rate maintained at 7.4%.

"We expect that Malaysia's unemployment rate to average at 3.3% in 2018. Moving forward, we anticipate domestic as well as global economic activities will stay on upward trajectory given key economic indicators are showing sign of optimism," said MIDF.

The research house forecast global trade to improve further this year, with Malaysia benefiting from the development via an increase in exports demand and more jobs creation, especially in the exports-oriented industries.

In October 2017, job vacancies stood at 150,000, which was higher than 145,200 in the previous month. The highest number of job vacancies was in the manufacturing sector at 64,100 followed by agriculture, forestry and fishing at 32,500.

"The increase in job vacancies is in line with robust performances of exports and industrial production in October which expanded strongly by 18.9% y-o-y and 3.4% y-o-y respectively. Looking ahead, we can expect job vacancies in November to stay high given that external trade and industrial activities remain on upbeat momentum," MIDF said.