Malaysia’s labour market continued to show steady growth in the first quarter of 2025, with gains across employment, labour force participation, and a slight decline in unemployment, according to the Department of Statistics Malaysia (DOSM).
As of March 2025, the number of unemployed persons fell to 529,600, registering an unemployment rate of 3.1%, unchanged from February. Chief Statistician Dato’ Seri Dr Mohd Uzir Mahidin attributed the improvement to a generally optimistic economic environment, which supported stable labour market development. The labour force expanded by 0.2% to 17.31 million persons, while the labour force participation rate (LFPR) held steady at 70.7%.
Employment growth also remained positive, with the number of employed persons rising by 0.3% to 16.78 million. Employees made up 75.2% of this figure, increasing marginally to 12.61 million, while the number of own-account workers grew by 0.6% to 3.15 million. Most job gains were concentrated in the Services sector, notably in accommodation and food and beverage services, information and communication, and professional, scientific, and technical activities. Manufacturing, Construction, Agriculture, and Mining and quarrying sectors also recorded employment increases.
Among the unemployed, 79.4% were actively seeking work. Of this group, nearly two-thirds had been unemployed for less than three months, while only 5.5% had been without work for over a year. The number of inactively unemployed — those not seeking work because they believed no jobs were available — dropped by 1.1% to 108,900.
Youth unemployment remained stable, with the rate for those aged 15 to 24 years holding at 10.3%, and for those aged 15 to 30 years at 6.3%.
The population outside the labour force saw a slight increase of 0.1% to 7.16 million. Domestic responsibilities were the main reason for non-participation, accounting for 43.7%, followed by schooling or training at 41.7%.
Quarterly figures reinforced the positive trend. In the first quarter of 2025, the labour force grew by 0.8% to 17.23 million, while the number of employed persons rose by 0.9% to 16.70 million. The unemployment rate fell to 3.1%, down from 3.2% in the fourth quarter of 2024. Notably, the number of people working fewer than 30 hours per week declined by 5.9% to 242,700. Time-related underemployment also decreased by 3.8%, maintaining a rate of 0.9%. However, skill-related underemployment saw a marginal increase of 0.4%, with 1.95 million tertiary-educated individuals working in semi- or low-skilled jobs, representing 35.7% of that cohort.
At the state level, W.P. Putrajaya recorded the lowest unemployment rate at 1.8%, followed by Melaka and Pahang at 1.9% each, and Selangor at 2.2%. Selangor also reported the highest LFPR at 77.9%, with W.P. Putrajaya and W.P. Kuala Lumpur following at 77.6% and 75.4%, respectively.
Uzir concluded that the labour market outlook remains optimistic, buoyed by robust demand, a stable economy, and strategic policy measures. He noted that continued growth in the Services and Manufacturing sectors, coupled with high labour participation, reflected growing confidence in the job market. Malaysia’s labour market is expected to maintain its resilience and momentum amid ongoing global economic uncertainty.
