KUALA LUMPUR (April 3): Malaysia’s employment grew by 2.1% in 2019, compared with 2.5% in 2018, mainly driven by the services sector, followed by the manufacturing and agriculture sectors.

The growth translated to an additional employment gain of 316,000 persons, while unemployment rate remained stable at 3.3%.

On the other hand, Bank Negara Malaysia (BNM) reported that retrenchments went up to 29,605 persons per annum, compared to 23,168 persons in 2018.

Despite being softer than the year before, the central bank said the labour market conditions remained supportive of growth in 2019.

From a skill-level perspective, the employment growth in 2019 was mainly driven by high and low-skilled workers, which grew by 3.9% and 6.5% respectively.

“Mid-skilled workers continued to account for the largest share of total employed persons at 59.5% (2018: 60.4%), followed by high-skilled workers at 27.6% (2018: 27.2%),” said BNM said in its Economic and Monetary Review 2019 report.  

Meanwhile, labour productivity growth — measured by real value-added per hour worked — slowed to 2.2% in 2019, compared with 3.4% in 2018, with broad-based moderation across all sectors.

“Services sector productivity growth moderated to 2.7% (2018: 5.0%), given the normalisation in production growth post-tax holiday and longer working hours. Productivity growth in the manufacturing sector also moderated (2.5%; 2018: 3.3%) due largely to slower production in the E&E subsector,” BNM said.

On the other hand, aggregate nominal wage in the private and public sectors grew at a slower rate of 4.2% and 3.7% respectively in 2019, compared with 6.0% and 4.5% in 2018, respectively.

The moderation was mainly weighed down by the manufacturing sector, registering a lower wage growth of 4.3% compared to 10.8% in 2018.

“The moderation was broad-based across most manufacturing industries, but particularly evident in export-oriented industries, which included the E&E subsector and petroleum, chemical, rubber and plastic products subsector,” BNM explained.

For more stories on BNM's annual report, click here.