The Malaysian Employers Federation (MEF) fears that up to 60,000 people could lose their jobs this year, double the yearly average of the past. MEF president, Syed Hussain Syed Husman said most job losses are expected to be in manufacturing and construction. He said unemployment would ultimately depend on the economic situation, particularly on how well small and medium size enterprises perform this year.
An estimated 98% of Malaysian businesses are SMEs, and Syed Hussain said government support had been vital in helping the businesses survive, especially after the Covid-19 pandemic. “We’ll have to wait and see what the 2023 budget holds in store for SMEs. It won’t be a rosy year for businesses, but it is manageable,” he said. He said a slowdown was expected in manufacturing and construction, while the retail and service business may not fare as well, as they depend a lot on domestic spending and international tourist arrivals. “If people cut down on spending, then we may see more retrenchments in these sectors,” he said.
“If we can hit our GDP growth target, it should be okay.”
Bank Negara Malaysia estimates that the economy will grow by between 4% and 5% this year. However, the Federation of Malaysian Manufacturers says the job market is expected to be stable this year with a recovery in the labour market, shown by the unemployment rate falling to 3.6% in December.
However, the Federation of Malaysian Manufacturers president Soh Thian Lai said the group did not anticipate any major retrenchments this year. He pointed out that Malaysia’s growth rate of 8.7% last year was reassuring for the business sector. Preliminary findings of an FMM survey on business conditions showed that employment continues to be stable amid a weaker outlook for the first half of 2023. “With continued efforts by employers to reskill and upskill existing workers, and government support to assist the unemployed to get the right skills to be gainfully employed, the labour market will remain resilient and strong in 2023,” he said.