Malaysia unemployment rate drops as sectors reopen during RMCO

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KUALA LUMPUR (Aug 7): Malaysia's June 2020 unemployment rate declined month-on-month to 4.9% from a record-high of 5.3% in May 2020 as more sectors, including the services industry, reopened due to the implementation of the nation's recovery movement control order (RMCO) to revive the country's economy while curbing the Covid-19 pandemic.

In a statement today, Statistics Department chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the number of unemployed persons declined by 52,900 individuals, or 6.4%, to 773,200 people in June 2020.

"The improvement in labour supply situation during the month was in line with the reopening of more economic sectors including education, social and religious activities following the RMCO.

"During the month, the number of employed persons grew marginally by 0.7% month-on-month from -0.3% in May 2020 to record 14.99 million persons. The increase was apparent in the services sector, as it observed its first month-on-month positive growth since January 2020.

"Among others, employed persons rose within the e-commerce activity, delivery services and information and communication technology related activities. It was also observed that the number of employed persons working less than 30 hours per week decreased by 35.5% to 470,100 persons as compared to 729,100 persons in May 2020,” Mohd Uzir said.

Malaysia's June 2020 unemployment rate at 4.9% was based on the 773,200 unemployed people and the nation's total labour force of 15.76 million persons during the month, according to the department.

The department said the country's labour force in June 2020 increased by 49,500 persons from the preceding month.

For the second quarter of 2020 (2Q2020), Mohd Uzir said today the nation's unemployment rate, however, increased to 5.1% compared to 3.5% in 1Q2020, led by the sharp rise in the May 2020 unemployment rate.

"During this quarter (2Q2020), labour utilisation had yet to resume at optimum level as businesses had only begun to regain their momentum. Thus, the (number of) employed persons decreased 2.4% to 14.88 million persons, largely in semi-skilled and low-skilled occupation.

"In terms of status in employment, all categories namely employers, employees, own-account workers and unpaid family workers recorded a decline as compared to previous quarter (1Q2020).

“As the initial stage of recovery kicked off, coupled with short-term stimulus packages by the government, the labour force situation in July 2020 is expected to grow and improve. A more promising situation is foreseen in the second half of 2020," he said.

Malaysia's Covid-19-driven restricted movement policy is initially known as the movement control order (MCO), which was gradually adjusted to include the conditional movement control order (CMCO) and RMCO as the situation evolved.

Malaysia's MCO, which was initially scheduled between March 18 and 31, 2020, requires non-essential businesses to stop operations, while the public was ordered to stay at home to curb the Covid-19 outbreak.

On March 25, Prime Minister Tan Sri Muhyiddin Yassin said the government decided to extend the MCO until April 14, because updates from the National Security Council and the Health Ministry indicated an increase in Covid-19 cases.

On April 10, Muhyiddin said the government was extending the MCO until April 28.

On April 23, Muhyiddin said the MCO would be extended for another two weeks until May 12.

On May 4, news reports, quoting Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob, indicated that regulations under phase four of the MCO were null and void with the commencement of the CMCO or phase five of the MCO.

On May 10, Muhyiddin said the CMCO would be extended to June 9.

On June 7, Muhyiddin said the CMCO scheduled to expire on June 9 will be replaced with the RMCO beginning June 10 until Aug 31.