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As of March 2026, the Labour Force Report by the Department of Statistics Malaysia (DOSM) recorded that Malaysia’s unemployment rate remains steady at 2.9%, unchanged from February 2026. The total number of unemployed persons increased slightly by 0.4% (+2,200 persons) to 509,000 persons, compared to 506,800 in February 2026.
In the unemployed group, 79.7% were actively unemployed, meaning they were available for work and actively seeking jobs. This group rose slightly by 0.3% to 405,800 persons, from 404,700 persons in February 2026.
Among the actively unemployed group:
- 64.1% were unemployed for less than three months.
- 20.5% were unemployed for less than 6 months.
- 10.5% were unemployed for less than 12 months.
- 4.9% were in long-term unemployment for more than a year.
Meanwhile, the remaining 20.3% were inactively unemployed, meaning they believed no jobs were available or believed they weren’t qualified so they were not actively seeking. The number increased by 1.1% to 103,200 persons.
Youth unemployment is high but stable
For those aged 15 to 24 years, the unemployment rate held at 10.2%, with 290,000 unemployed youths.
For those aged 15 to 30 years, the rate was 6.2%, with 390,900 unemployed youths. Both figures remained unchanged from February 2026.
Malaysia’s unemployment rate looks stable
Overall, the current 2.9% unemployment rate in Malaysia looks favourable compared to the pandemic period where if reached 4.5 to 4.6% in 2020-2021.
DOSM noted that while Malaysia’s labour market remains resilient and stable, the road ahead calls for cautious optimism.
Some good news
Gross Domestic Product (GDP) grew 5.3% year-on-year in Q1 2026, with economic growth expected to remain within 4 to 5%, underpinned by private consumption, sustained export demand, especially in the electrical and electronics (E&E) sub-sector,and continued tourism recovery.
Employment growth is expected to grow at a moderate pace, supported by sustained expansion in the Services sector, especially in tourism-related and consumer-facing industries.
The increased adoption of automation, digitalization, and AI is expected to drive stronger demand for high-skilled workers. However, this might mean less reliance on lower-skilled roles in certain industries. In other words, the importance to upskill and reskill remains crucial.
Some things to watch out for
While Malaysia’s status as a net energy exporter provides a partial buffer, the ongoing global energy crisis stemming from geopolitical tensions in West Asia resulting in rising oil prices, supply disruptions, and logistical constraints will affect production costs and inflation globally.
This may also affect employment in the Manufacturing sector which are sensitive to fluctuations in external demand. Meanwhile, the Construction sector is likely to benefit from ongoing infrastructure and development projects.
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Malaysia’s Unemployment Rate Is At Favourable 2.9%, Youth Unemployment Still High
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