Malaysia Unemployment Hits 11-Year Low as Services Hiring Anchors Growth Outlook

Malaysia’s unemployment rate fell to an 11-year low in November as steady services hiring, supportive external conditions and resilient demand reinforced confidence in labour market strength heading into 2026.

Malaysia’s labour market continued to show resilience in November, with the unemployment rate easing further to an 11-year low of 2.9%, signalling steady economic momentum amid a firmer growth outlook and improving external conditions. The number of unemployed edged slightly lower to 518,400 persons from 518,900 in October, while active jobseekers also declined marginally to 413,500.

Services Anchor

Total employment expanded by 0.2% month-on-month, maintaining the same pace as the previous month. Hiring remained firmly driven by the services sector, particularly human health and social work activities, wholesale and retail trade, and food and beverage services. These segments continue to benefit from resilient domestic consumption and structural demand.

Employment gains were also recorded across manufacturing, construction, agriculture and mining, reflecting broad-based labour market support.

By employment category, growth among employers and own-account workers moderated slightly, while the number of employees remained broadly unchanged. Meanwhile, the labour force grew by 0.2% to 17.61 million, with the participation rate steady at 70.9%, suggesting stable labour supply conditions.

Looking ahead, services sector hiring, which accounts for nearly two-thirds of total employment, is expected to remain the key anchor in 2026. Support is likely to come from sustained consumer spending, Visit Malaysia 2026 initiatives, and continued investment inflows.

A tight labour market, combined with income-related measures such as the one-off RM100 SARA subsidy scheduled for February, should further underpin domestic demand.

Externally, easing tariff risks and a steady global semiconductor outlook driven by the AI-led technology upcycle provide additional support for manufacturing employment. Malaysia’s manufacturing PMI also recorded a second consecutive month of job growth in December, as firms prepared for new projects.

Overall, firm labour market conditions continue to support a positive growth outlook despite lingering global uncertainties.

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