Malaysia unemployment rate anticipated to increase
The effect of massive job loss in the US may hit Malaysia soon, possibly increasing the national unemployment rate, which sits at 3.5% as of the year 2007. US is rapidly going into the recession mode as the weakening of the US dollars continues.
As far as the US economy is concerned, no news is good news at the moment.
On March 2008, the US employers cut 80,000 jobs, which is the biggest cut in employment in 5 years. The figure is also much higher than the expected 50,000 as anticipated by analysts. The huge figure has resulted in a spike of unemployment rate to 5.1% compared to an already steep 4.8% in February 2008. Workers in various industries and specializations including banking, manufacturing, construction, retail, property & real estate, hotel, accounting & finance, engineering, legal and other services have been affected with the job cuts.
Citigroup, the holding company of Citibank, suffered their worst loss in the history of its establishment, recording a stunning $10 billion quarterly loss recently.
US-based and multinational companies operating in Malaysia may take similar action to their counterparts, responding to the weak economy by cutting their expenditures. And this could mean cutting the size of the workforce, laying employees off.
In 2007, under the 9th economic plan, the Malaysia government has launched a series of mega-infrastructure projects, including the Northern Corridor Economic Region (NCER), Iskandar Development Region (IDR), East Corridor Economic Region (ECER), Sabah Development Corridor (SDC) and Sarawak Corridor of Renewable Energy (SCORE).
The cluster of projects has been touted as a backbone to propel the national economy and answer to the unemployment rate, which has been showing a somewhat yo-yo performance in the recent years. However, with the change in the political landscape across the nation, such objectives and implementation are yet to be assessed.
Table: Malaysia Unemployment Rate 2003-2007 (Source: IndexMundi.com)