KUALA LUMPUR (Mar 16): AmBank Group Research said the digital economy and automation was seen impacting the Malaysian labour market going forward.

In a note today, AmBank group chief economist and head of research Dr Anthony Dass said the unemployment rate in January rose slightly to 3.4% due to lower net jobs created in January and marginally higher labour force participation at 68.2%.

Besides, he said the number of people outside of the labour force (housewives, students including those going for further studies, retirees, disabled persons and people seeking employment) fell marginally by 0.1% month-on-month to 7.07 million people in January.

“With the economy poised to grow at a 5.5% in 2018 from 5.9% in 2017, we should see the labour market remaining firm with the unemployment rate hovering around 3.2% – 3.3%.

“However, upwards pressure on the labour market cannot be ruled out with the growing digital economy, which is expected to contribute about 20% to the gross domestic product by 2020.

“It can happen when individuals at all levels fail to actively develop their skills and stay relevant, and instead challenge the current changing trends in their respective sectors,” he said.

Dass said many sectors are being reshaped by technology, creating new roles and also different demands for those in existing jobs.

“Besides, automation is also impacting the labour market. It can push up the unemployment rate to 3.4% – 3.6%,” he said.