Latest news with #WilliamsBusinessConsultancySdnBhd
The Star
20-07-2025
- Business
- The Star
Unemployment to remain low, challenges expected
PETALING JAYA: Malaysia's unemployment rate is expected to average at below 3% this year, underpinned by increased employment and sustained job opportunities, particularly in the services sector. However, economists are cautioning that factors such as geopolitical uncertainties could certainly pose risks. Malaysia's unemployment rate dropped from 3.1% in March to 3% in April and May, the lowest in 10 years, according to the Statistics Department. Going forward, Williams Business Consultancy Sdn Bhd founder and economist Geoffrey Williams expects the country's unemployment rate to remain low. 'In the second half of this year, unemployment will be low as usual, underemployment will be high as usual and wages will barely cover rising prices for most people,' he quipped. 'In one sense, the labour market is correcting itself because people are moving more into the gig-economy, micro-enterprises, freelancing and side hustles. 'This is because formal employment is a very bad deal with low wages, bad terms and conditions and not enough flexibility,' Williams told StarBiz. Centre for Market Education chief executive officer Carmelo Ferlito meanwhile said he 'does not foresee any short-term radical change' to the country's unemployment rate. 'I think Malaysia's unemployment remains within what can be called structural unemployment and at a very low rate. 'However, we need to watch the medium-run, to see the effects of the trade war (if it will indeed happen or if it will remain on paper) and the recent decisions from Bank Negara, which may have an alternance of good and bad effects in the medium and long run.' Bank Negara cut the overnight policy rate (OPR) by 25 basis points to 2.75% at its July Monetary Policy Committee meeting. Commenting on Malaysia's job market performance so far this year, Williams noted that everything does look good. At least on paper. 'More people are joining the labour force, but this is not a good signal because they are young individuals who are dropping college to get an income for their families or taking part-time jobs to boost the household income. 'Moreover, unemployment is remaining low but underemployment has become a structural problem. People take jobs below their qualifications because they have no choice and need to support themselves and their families.' Williams also noted that wages are still low and stagnant. 'Median wages only rose by 3.4% last year to around RM3,045. This means half of the people on formal private sector contracts are essentially 'working poor'. They have a job but are still struggling to make ends meet. 'As the cost of living rises, the amount you can buy with your wage, the so-called median 'real wage', has fallen by almost 9%.' Williams said the downward pressure on wages is due to higher labour force participation by younger people and the cost of living. 'Wages are forced down and prices are rising. Also, in manufacturing, persistently low productivity means manufacturing wages have been falling in real terms since the Covid-19 pandemic.' Meanwhile, BIMB Research said the country's job market performance thus far points to rising confidence among job seekers and stronger workforce participation, supported by continued economic expansion. 'The combination of steady job creation and low unemployment suggests improved job matching, with more individuals able to find suitable employment. 'Labour-force growth persisted, bolstered by sustained demand for electrical and electronics exports and broader economic resilience.' However, the research house noted that youth unemployment remained elevated at 10.2%, despite a slight 0.1 percentage point improvement, highlighting persistent structural barriers to youth employment and labour market entry. 'Looking ahead, Malaysia's labour market is expected to maintain a steady trajectory through 2025, supported by resilient domestic demand and ongoing expansion in the services and technology sectors. 'These favourable labour market conditions are likely to bolster consumer spending and help sustain economic momentum, even as global trade headwinds persist.' However, BIMB Research said export-oriented industries may come under pressure from elevated global tariffs, which could dampen hiring activity and wage growth in the external sector. 'In this context, the recent cut in the OPR to 2.75% is expected to provide a timely boost by lowering borrowing costs, stimulating domestic demand, and encouraging private sector hiring, particularly in interest-sensitive sectors such as construction, services, and manufacturing. 'Overall, employment growth is projected to remain firm, with the unemployment rate expected to average around 3.2% for the year, reflecting a broadly stable and resilient labour market despite external uncertainties.' Elsewhere, MIDF Research also remains positive on the outlook for Malaysia's job market. 'We expect Malaysia's unemployment rate to average lower around 3% in 2025 (previous forecast: 3.1%; 2024: 3.3%), underpinned by increased employment and sustained job opportunities particularly in the services sector. 'Job creation and strong labour demand are expected to be driven by resilient domestic consumption and sustained investment activity.' However, the research house said it remains cautious that tariff-related disruptions could dampen global demand and weigh on hiring in export- and commodity-linked sectors. 'On the other hand, rising employment and steady wage growth are likely to be concentrated in domestic-oriented sectors that are relatively insulated from the impact of higher US tariffs.'
New Straits Times
28-05-2025
- Business
- New Straits Times
EU's 'standard risk' label on Malaysian palm oil clouds upcoming FTA talks
KUALA LUMPUR: The European Union's (EU) 'standard risk' label on Malaysian palm oil has thrown a wrench into next month's free trade agreement (FTA) talks, economists said. The classification, they said, sends a provocative signal at a time when both sides are hoping to reboot stalled discussions after more than a decade. Williams Business Consultancy Sdn Bhd director Dr Geoffrey Williams said it also reflects the EU's intent to use non-tariff barriers as its main negotiating tool, echoing past failed strategies. "This is a disappointing start to the FTA talks and signals that the EU intends to leverage non-tariff trade barriers based on their own unverified and disputed sustainability criteria as their main negotiation tool. "It is exactly the same bullying tactic used by the United States (US), but through non-tariff barriers rather than tariffs," he told Business Times. Over A Decade Of Pause Malaysia and the EU are set to resume FTA negotiations next month, nearly 13 years after talks stalled over disagreements on procurement access and sustainability requirements. Universiti Utara Malaysia Associate Professor Dr Irwan Shah Zainal Abidin said the 'standard risk' classification could negatively impact the tone of the upcoming talks, especially since palm oil remains one of Malaysia's key export commodities to the EU. "This classification, rather than a 'low risk' label, will certainly have negative implications for the renewed FTA discussions, particularly for Malaysia," he said, adding that palm oil will be a central point of contention. Formal negotiations between Malaysia and the EU were first initiated in 2010 but were suspended in 2012 after little progress was made on key issues. Williams said the current posture from the EU suggests little has changed since the talks first began. The negotiations, he said, were hindered by two key demands from the EU namely access to federal government procurement and entry into Malaysia's automotive sector. To advance these goals, Williams said the EU employed non-tariff sustainability restrictions on palm oil and imposed stringent technological standards on electrical and electronic products as bargaining tools. "They failed to reach an agreement then and it looks like they intend to pick up where they left off. So the EU-Malaysia FTA risks becoming a repeat of history, ending in either overly extended negotiations or complete failure again," he added. Irwan said the EU's risk assessment may be based on outdated data or misconceptions, rather than the current realities on the ground. He argued that the 'standard risk' label is deeply flawed and should be contested, suggesting it likely stems from inadequate engagement or entrenched bias against palm oil. "The reality is that deforestation linked to palm oil is no longer the case in Malaysia," he added. Irwan also pointed to the implementation of the Malaysian Sustainable Palm Oil (MSPO) certification, which has been mandatory since 2020, as a key policy shift that the EU appears to have overlooked. "There is a need for the EU to consider country-specific contexts. Not all palm oil production leads to deforestation, certainly not in Malaysia," he added. In contrast to the EU's rigid and outdated frameworks, Williams said Malaysia has demonstrated greater agility in forging trade deals. He pointed to Malaysia's swift conclusion of an FTA with the United Kingdom and a tariff arrangement with the US within weeks. This, he added, highlighted the stark difference in negotiating pace compared to the EU, whose "efforts remain bogged down". Sharp Criticism The EU's recent move to assign Malaysia a 'standard risk' designation under its EU deforestation regulation (EUDR) has also drawn sharp criticism from the Malaysian Palm Oil Council. It argued that the label unfairly undermines Malaysia's national sustainability standards, particularly the MSPO scheme. Williams echoed this concern, calling the designation a unilateral and protectionist tool. "It is simply a way of making life difficult for Malaysian palm oil producers by saying the MSPO standards are too weak and pose a sustainability risk. "It is a unilateral negative product label rather than an actual ban," he said. Under the EUDR, countries and commodities are classified into three categories namely low risk, standard risk and high risk. The classifications determine the level of scrutiny and due diligence required for goods such as palm oil, soy and timber entering the EU market. A 'low risk' status means simplified checks, while 'high risk' implies stringent controls. 'Standard risk', which Malaysia has been assigned, subjects exporters to the full due diligence requirements under the regulation. "A 'low risk' designation would reassure EU buyers that Malaysian palm oil was generally safe from compliance breaches that could halt production or sales," Williams said. "But with the 'standard risk' tag, it damages brand perception, consumer confidence and puts pressure on Malaysia to engage EU consultants to fix so-called operational gaps." Efficient Sector, One Of The Best According to Irwan, Malaysia's palm oil sector is among the most efficient globally and contributes positively to climate goals. This efficiency is reflected in palm oil's significantly higher yields compared to other oil crops such as sunflower and soy, along with its role as a carbon sequester. Labelling Malaysia as 'standard risk' without accounting for these advantages, he argued, overlooks the broader environmental context. Given this, he stressed that any credible risk classification must be based on a holistic evaluation of a country's overall climate impact. "Any country that has achieved zero conversion of natural forest should not be classified as 'standard risk'. "There is still time for Malaysia to engage with the EU and highlight the real progress being made, especially by smallholders working to reduce forest loss and degradation," he added. Malaysia exported about 1.07 million tonnes of palm oil to the EU in 2023, representing about 7.1 per cent of its total palm oil exports. The export value of crude palm oil alone amounted to roughly US$446 million, with a volume of 392,811 tonnes, making the EU one of Malaysia's key markets. Despite this, trade volumes have shown signs of strain. Between July 2022 and March 2023, Malaysia's palm oil exports to the EU fell by around 30 per cent, totalling 426,000 tonnes over the period. The decline has been attributed in part to regulatory uncertainty and shifting EU sustainability requirements.
