Malaysia’s ‘modest’ growth a chance for firms to diversify in 2017?
Via The Malay Mail Online : Malaysia’s ‘modest’ growth a chance for firms to diversify in 2017?
Malaysia’s job market last year was regarded as nothing short of sluggish, even though recent data from the World Bank showed the country has been growing at 4.2 per cent in the face of a “declining global economy”.
Data from the Department of Statistics also showed a 0.4 per cent decrease in the labour force in September from August.
But economists believe Malaysia’s “modest” growth rate may present opportunities for some companies to diversify their business interests and help lift the job market this year.
“Logically, one may think that Malaysia should be impacted far more than what we are going through but it is commendable for the country to perform above par during this trying times by registering a growth in GDP and in some trading sectors,” Yeah Kim Leng, professor of economics at Sunway University Business School, told Malay Mail Online in a recent interview.
Statistics by the Malaysia External Trade Development Corporation (Matrade) showed overall growth in both manufactured and agricultural goods in the first 10 months of 2016.
Some other sectors like mining goods experienced a slide of 24 per cent to RM50.08 billion due to lower exports of liquefied natural gas (LNG) and crude petroleum while petroleum products took up 6.8 per cent of the total exports of the country or RM43.6 billion, which was also a decrease of 3.1 per cent from the same period in 2015.
“Of course, [at times like this] companies will tend to cut down on expenditure when growth slows down and hence making it difficult for Malaysians, especially fresh graduates with no working experience to find new jobs,” said another economist formerly with the government.
Requesting anonymity, the economist said the government was, in fact, doing its best to ensure a robust economy and added that Putrajaya was doing well within its means to cushion the impact.
“One way to improve our current situation is for cash-rich companies to diversify their businesses and invest in the country as this would also create more job opportunities,” he said.
However, employers maintained a glum outlook on 2017 prospects for recruiting new staff.
Datuk Shamsuddin Bardan, president of the Malaysian Employers Federation, said the sluggish economy is expected to last indefinitely into 2017.
“Look at the banking industry, for example, 48 per cent of employees’ retrenchment in 2015 came from this sector and this year. It has been equally sluggish for the finance world as we see the closing of some bank branches.
“In 2017, MEF predicts the condition to be the same, if not more challenging,” he told Malay Mail Online in a recent interview.
Apart from the banking industry, other sectors were also similarly affected from the global economic slowdown and depreciating value of the ringgit, Shamsuddin said.
He claimed several giant corporations like Nike and adidas have moved some of their operations here to the US and the UK because of technological advantages and business policy perks.
“Although labour is cheaper here, incentives given by the governments in the US and UK coupled with technological factors available in such countries are far better than ours here.
“And when these firms leave Malaysia, it obviously means lesser investors and smaller job market for our people,” he said.
In November, the Department of Statistics revealed that unemployment rate stood at 3.5 per cent as for September with a labour force participation rate at 67.6 per cent, which constitutes to 14.7 million people.
The nation’s unemployment rate for the month, however, remained the same as the previous month but showed an increase of 0.2 per cent year-on-year comparison. A 0.2 per cent increase meant there are at least 50,000 jobless graduates out there.
Last month, the Monster Employment Index showed that online hiring decreased by 12 per cent in October compared to the same period last year.
In its study, it showed that the production, manufacturing, automotive and ancillary sector was the only industry that showed no change in hiring while the retail sector saw the steepest decline by 23 per cent.
Customer service jobs were also the least in demand with a decrease by 55 per cent year-on-year comparison.
However, a poll by Jobstreet.com Malaysia showed that 54 per cent of employers, mainly from the manufacturing, engineering and financial services, said they would increase their hiring in the fourth quarter of 2016.
“In the study, 12 per cent of the employers polled that they would be cutting back while 34 per cent polled to maintain a status quo,” the recruitment agency’s senior marketing executive Sarika Ram Lubhaya told Malay Mail Online when contacted recently, but did not disclose the exact number of companies polle
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