The Covid-19 pandemic has forced the need for a policy to redeploy workers from affected industries to those that are surging in labour demand, the Department of Statistics Malaysia said in its latest report on the economy.

Certain industries are more adversely affected by the pandemic, such as hospitality and retail, while others are seeing a demand for manpower, it said in its first instalment of the Malaysian Economic Statistics Review for 2020.

“Moving forward, a dynamic labour market policy is needed to address this labour market disequilibrium.

“In the short term, labour shortages are foreseen in essential services industries namely health, agriculture and food based industry as the demand increases in these industries.

“Therefore, these sectors have the potential to absorb labours who faced job losses.”

Some of these changes to the labour market are brought about by “new normal” practices to doing business in a Covid-19 world that has affected operating procedures in order to balance health concerns with economic recovery and sustainability.

“This, in turn, will affect the labour market dynamics as demand for labour may fall in particular industries yet rise in the others.”

Covid-19 impact only just starting to be felt

Some labour market statistics in the report for the first quarter of 2020 showed that despite the slower economic momentum, 19,000 jobs had been created during this period.

But the number of jobs created was less than the 24,000 jobs created in the same quarter last year.

Most of the new jobs in the first quarter of this year were also created in January and February. The movement control order (MCO) against Covid-19 was imposed on March 18.

Of the 19,000 new jobs created, 48.3% were skilled jobs, and 45.7% were in semi-skilled category.

The department said that the repercussions of the Covid-19 outbreak and the resulting MCO to contain have “only begun” to be felt in the labour market for the first quarter of 2020.

Indicators such as productivity and number of hours worked, all showed a drop for the first quarter.

The industries that survived best were capital intensive ones that had adopted high technology and automation.

“These were more resilient as compared to labour intensive industries.

“For instance, labour intensive segments of the services sector such as food, beverages and accommodation registered a decline in value added per employment, as opposed to finance and insurance which sustained, as well as information and communication, which improved.

“The use of automation allowed for flexibilities for business operations to adjust swiftly in the face of crises, hence providing business sustainability while maintaining productivity.” – May 29, 2020.