Malaysia’s Unemployment Rate Falls to 3% in April 2025 — Lowest in a Decade
Malaysia’s labour market has reached a major milestone, with the unemployment rate dropping to 3% in April 2025, the lowest level recorded in the past 10 years. According to the Department of Statistics Malaysia’s Labour Force Report, this marks a further decline from 3.1% in March, highlighting the country’s strong economic recovery and job creation momentum.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin attributed the positive development to Malaysia’s stable economic growth, rising domestic demand, and expanding employment opportunities across various sectors.
📊 Key Highlights – April 2025 Labour Market at a Glance
| Indicator | April 2025 | March 2025 | Change |
|---|---|---|---|
| Unemployment Rate | 3.0% | 3.1% | ↓ 0.1% |
| Unemployed Persons | 525,900 | 529,600 | ↓ 0.7% |
| Labour Force | 17.34 million | 17.31 million | ↑ 0.2% |
| Labour Force Participation Rate (LFPR) | 70.8% | 70.7% | ↑ 0.1% |
| Employed Persons | ↑ (unspecified exact figure) | – | Consistent growth |
| Outside Labour Force | 7.17 million | 7.16 million | ↑ 0.2% |
🏢 Services Sector Remains the Key Employment Engine
The services sector continues to be the primary driver of job creation, especially in sub-sectors such as:
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Wholesale and retail trade
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Accommodation and food services
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Transportation and storage
These industries reflect Malaysia’s ongoing shift toward a services-based economy, which now accounts for a majority share of national employment. The growth has been further supported by the rebound in domestic tourism, logistics demand, and consumer spending.
🏭 Broad-Based Gains Across Key Sectors
Besides services, employment improvements were also seen in:
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Manufacturing: Demand for skilled and semi-skilled labour continues to rise, particularly in electronics and E&E sectors.
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Construction: Ongoing urbanisation and infrastructure projects, including MRT3 and the Pan Borneo Highway, are fuelling job opportunities.
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Agriculture: Seasonal hiring and agri-tech investments are supporting growth in rural employment.
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Mining & Quarrying: Stable commodity prices and export demand have helped sustain jobs in resource-linked activities.
👥 Youth Unemployment Steady at 10.3%
Despite overall progress, youth unemployment (ages 15–24) remains a key area of concern, holding steady at 10.3% with 298,300 unemployed youths in April. This figure underscores ongoing challenges such as:
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Mismatches between skills and employer demands
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Competition for entry-level roles
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Delayed transitions from education to employment
Efforts to bridge skills gaps through upskilling, TVET, and digital training programmes are critical in addressing this structural issue.
👨👩👧 Why 7.17 Million Remain Outside the Labour Force
The number of people outside the labour force increased slightly to 7.17 million, primarily due to:
| Reason | Share (%) |
|---|---|
| Housework and family care | 43.7% |
| Schooling or training | 41.1% |
These categories highlight the importance of:
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Flexible work arrangements to attract caregivers back into the workforce
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Continuous education and retraining opportunities to equip future entrants
🚀 Economic Outlook: Positive Momentum Expected to Continue
Chief Statistician Mohd Uzir expressed confidence that Malaysia’s labour market will continue expanding in the coming months, driven by:
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Resilient domestic demand
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Sound macroeconomic policies
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Digitalisation and automation in key industries
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Robust FDI inflows, especially in semiconductors, renewable energy, and logistics
“Despite global geopolitical tensions, Malaysia’s labour force is seen to remain resilient, supported by the growing services sector and technology investments,” he noted.
📈 What This Means for Businesses and Policymakers
Malaysia’s improving labour market offers several takeaways for both public and private stakeholders:
For Employers:
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A tighter job market means increased competition for skilled talent
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Need to rethink employer branding, training, and upskilling programmes
For Policymakers:
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Continue supporting labour mobility through reskilling and digital literacy
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Enhance labour market inclusivity for women, youth, and underrepresented groups
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Monitor global headwinds while diversifying economic drivers beyond exports
🌏 Malaysia in Regional Context
Malaysia’s April unemployment rate of 3% is among the lowest in Southeast Asia, especially compared to:
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Indonesia (5.3% in Q1 2025)
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Philippines (4.5% in April 2025)
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Vietnam (2.3% in Q1 2025)
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Thailand (1.2%, but with different labour force definitions)
This reflects Malaysia’s balanced economic recovery, supported by both export resilience and robust domestic consumption.
✅ Conclusion: A Milestone for Malaysia’s Labour Market
Malaysia’s job market is showing remarkable recovery, with April 2025 marking the lowest unemployment rate in a decade. The continued expansion of the labour force, coupled with improvements across nearly all major sectors, reflects a healthy and resilient economy.
However, challenges such as youth unemployment, participation barriers for caregivers, and skill mismatches remain—and addressing these will be crucial for sustaining inclusive and long-term growth.
With pro-business policies, ongoing digital transformation, and a favourable investment climate, Malaysia is well-positioned to maintain its positive labour market momentum throughout 2025 and beyond.
