MEF executive director Shamsuddin Bardan said manufacturers of consumer products for the local market were especially affected as consumers adopted a conservative approach in their spending.
The influx of cheaper products from other countries also made things worse, he said.
“Although the lower ringgit benefitted exporters, it also resulted in an increase in raw material costs that affected smaller businesses,” he told FMT.
The human resources ministry recently revealed that the manufacturing sector saw the most retrenchments among all sectors last year, with 25,370 workers affected.
This was followed by the services sector with 1,476 retrenchments, retail with 1,275 and finance with 1,210.
On the services front, Shamsuddin said the rising cost of living had resulted in consumers eating out less, while hotels struggled against fierce competition from online accommodation company Airbnb.
“Some hotels have also scaled down on their food and beverage offerings, forgoing buffets for a la carte services to cut costs,” he said.
In the retail sector, online shopping affected “brick and mortar” shops, while automation continued to take over tasks previously done by humans in the financial sector which saw significant job losses in the last two years.
Shamsuddin added that those in the insurance industry would likely face a tough year as more companies opted for automation.
“For 2018, we see that the job market will continue to be sluggish, with hiring centred around urgent or critical vacancies.”
Shamsuddin said, however, that there were many opportunities in sales and marketing, as many local graduates shunned jobs in these areas because they offered lower basic salaries and were target-oriented.
“The tourism sector, with the exception of hotels, is another industry where there will be many opportunities,” he said.
“Jobs such as tour guides, transportation, and food and beverage will be more in demand.”
Meanwhile, Federation of Malaysian Manufacturers (FMM) vice-president Nathan Suppiah said 2018 was expected to be better for manufacturing as trade grew and more investments entered the country.
“The stronger ringgit is also expected to spur the economy, leading to better sales.”
He said he hoped the government would continue to support manufacturers by giving grants to small and medium enterprises for automation and upscaling.
Almost 35,000 Malaysians lost their jobs in 2017, says ministry