According to the Annual Statistics of the Labour Force, Malaysia 2024, the unemployment rate fell to 3.2%, dipping below the pre-pandemic level of 3.3% recorded in 2019.
The number of unemployed persons also dropped to 534,100, driven largely by a decline in unemployment among youths aged 15 to 24.
“Concurrently, the labour force increased by 3.3% to 16.90 million persons compared to 16.37 million in the previous year. The labour force participation rate (LFPR) also rose to a new record high of 70.6% from 70% in 2023,” the department said in a statement today.
The number of employed persons also saw positive annual growth, rising by 3.5% to 16.37 million from 15.81 million in 2023.
“Accordingly, the employment-to-population ratio, which indicates the ability of an economy to create employment, increased by 0.7 percentage points to 68.4% from 67.7% in 2023,” it said.
In terms of employment status, 78.5% of employed persons were classified as employees, while the number of own-account workers rose to 2.52 million, making up 15.4% of total employment.
Most employed persons remained in semi-skilled occupations, representing 56.5% of total employment or about 9.26 million persons, followed by skilled occupations (4.94 million) and low-skilled occupations (2.17 million).
From a sectoral perspective, the services sector remained the largest employer, comprising 65.6% of total employment, followed by the manufacturing sector (16.3%) and the agriculture sector (9.0%).
The construction sector accounted for 8.5% of total employment, while the mining and quarrying sector recorded the smallest share at 0.5%.
The department also said underemployment improved in 2024, with the number of employed persons working less than 30 hours a week due to the nature of their jobs or insufficient work falling by 6.1% to 212,500, from 226,300 in 2023.
As a result, the underemployment rate declined to 1.3% from 1.4% previously.
Youth unemployment dropped to 10.3%, with the number of unemployed youths falling by 4.1% to 284,700. Unemployment among adults aged 25 to 64 also improved slightly, declining to 1.8%.
At the state level, Putrajaya recorded the lowest unemployment rate at 1.1%, followed by Melaka (1.6%), while Penang and Pahang each recorded 2.0%.
Putrajaya also registered the highest LFPR at 78.7%, followed by Selangor (77.9%), Kuala Lumpur (75.4%), and Penang (72.0%).
In terms of female labour force participation, five states exceeded the national average of 56.5% – Putrajaya (79.4%), Selangor (70.3%), Kuala Lumpur (66.6%), Melaka (58.4%), and Penang (57.6%).
Despite the positive trends, 7.02 million persons remained outside the labour force, primarily due to housework or family responsibilities (43.1%), followed by those in the schooling or training category (41.3%).
Looking ahead, the department said the country’s labour market is expected to remain resilient in 2025, supported by stable economic growth, Malaysia’s Asean chairmanship, and initiatives like the Asean Villages Network, which aim to boost rural development and workforce upskilling.