Malaysia jobless rate dips to 3% in Q2, outlook stable

Malaysia’s unemployment rate fell to 3% in Q2 2025, with employment rising and jobless numbers declining. Officials cite strong domestic demand, tech investment, and digitalisation as growth drivers, while the PM pushes for resilient semiconductor supply chains and strategic partnerships.

Kuala Lumpur: Malaysia’s unemployment rate for the second quarter of 2025 dropped by 0.1 percentage points to three per cent compared to the previous quarter, official data showed Monday.

The Department of Statistics Malaysia said in a statement that the labour force experienced a growth of 0.8 per cent to 17.37 million persons during the second quarter, Xinhua News Agency reported.

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The labour force participation rate increased marginally by 0.1 percentage points to reach 70.8 per cent, compared to 70.7 per cent in the previous quarter.

Reflecting this trend, the number of employed persons increased by 0.9 per cent to 16.85 million.

Meanwhile, the number of unemployed persons showed a decline of 1 per cent to 520,900 persons.

“Malaysia’s labour market is observed to be in a stable outlook in the coming months due to rising domestic demand, higher labour productivity, increased employment opportunities, and broad-based investments, particularly in technology and strategic sectors,” it said.

“Although there are challenges such as talent migration, global trade tensions, and inflation, government policies focusing on digitalization, technical training, and investment incentives are expected to sustain medium- to long-term growth in the labor market,” it added.

Last month, Malaysian Prime Minister Anwar Ibrahim said that Kuala Lumpur will prioritise working with reliable partners and strengthening resilience in its semiconductor sector to shield it against external disruptions and trade tensions.

Deepening regional cooperation through the Association of Southeast Asian Nations (ASEAN) and other mechanisms will also help the sector resist external shocks and facilitate development through research and development, as well as by creating demand as companies in the region upskill and improve their capabilities, Anwar said in his keynote speech at the ASEAN Semiconductor Summit 2025.

“True supply chain resilience means eliminating weak links, either by producing what we need effectively or securing reliable partnerships to access what lies beyond our domestic capabilities. In these volatile times, diversifying our options is not just wise, it is essential,” he said.

“Our established semiconductor ecosystem is well poised to help us move beyond an FDI-first model and focus on building homegrown champions. This does not mean turning away investors, but being more strategic and prudent. We want long-term collaborators who grow with us, and we will continue to welcome partners who strengthen our supply chains, transfer their knowledge and technologies,” he added.