Malaysia’s labour market is expected to strengthen further and return to pre-pandemic levels in 2024, backed by the encouraging momentum of the domestic economy, reports The Star Malaysia, citing Centre for Market Education chief executive officer Carmelo Ferlito. According to Ferlito, the level of foreign direct investments (FDIs) into the country, political stability and economic conditions will also play a vital role in spurring the local labour market.

Ferlito said, "There are different factors which may be at play in the near future. One of them is how much of the improving employment conditions were just the result of the previous years’ fiscal stimuli; and how much instead is due to the actual structure of the economy.” 

Additionally, Ferlito said the level of business confidence will also play a crucial role in boosting the country’s labour market. “The question is whether domestic and foreign investments will improve. This will depend both on the direction of the new cabinet and the evolution of the international scenario,” Ferlito said. MIDF (Malaysian Industrial Development Finance Berhad) research said Malaysia’s average unemployment rate is expected to average at 3.5% in 2023 and return to pre-pandemic levels at 3.3% in 2024. “The return of non-citizen workers is expected to boost overall employment and reduce the jobless rate. As of the third quarter of 2023, non-citizens’ employment is almost minus 0.8% lower than pre-pandemic levels.

“The steady labour outlook is mainly supported by domestic demand, which is augmented by improving tourism activities, implementation of infrastructure projects, sustained FDI flows and potential turnaround in external trade that should help sustain job opportunities.

“This would help cushion the risks from a more moderate growth momentum, cautious business sentiment and lingering macro headwinds (such as global interest rate outlook, China’s property woes and geopolitical tensions) going into 2024,” United Overseas Bank stated.