Jobless rate of 3.6% in Dec-Feb period marks lowest rate in more than 2 years

The labor market continued to improve as the city's jobless rate dipped to 3.6 percent in the three months through February, its lowest level since July-September 2008.

The figures also beat market expectations. Irina Fan, a senior economist at Hang Seng Bank, said she had expected a slightly higher rate of 3.7 percent. Financial Secretary John Tsang also said in his budget speech on February 23 that he sees "limited room for further significant decline" in the jobless rate, which "has already fallen back to a relatively low level".

The latest figure was two percentage points lower than the 3.8 percent recorded during the three months ended January, the Census and Statistics Department said on its website Thursday.

It also marks the lowest rate since July-September 2008 when a jobless rate of 3.4 percent was reported.

The underemployment rate stood at 1.7 percent for the three months ended February, down from 1.8 percent in the preceding three months.

The number of people unemployed dropped by around 6,900 to 123,300, the lowest level since April-June 2008, according to Matthew Cheung Kin-chung, Secretary for Labour and Welfare.

New jobs were mainly seen in the insurance, food and beverage services as well as the retail sectors.

The past thee months saw the city's labor force fall by around 13,600 to 3,698,700. Total employment shank by around 6,600 over the same period and stood at 3,575,500 for the December-February period. The decline, said Cheung, was "in tandem with reduced business activities and labor demand" following the end of the lunar new year holidays.

Until February, the city's total employment had risen for eight months in a row and reached an all-time high of 3.58 million in the previous reporting period ended January.

Cheung was positive about the near-term outlook for Hong Kong's job market. "Employers generally are still adopting a positive attitude toward staff hiring. The unemployment rate is expected to remain at low levels in the next few months," he said.

Hong Kong's gross domestic product expanded by 6.2 percent during the fourth quarter of 2010 compared with a year ago. For full-year 2010, the city's economy was predicted to have grown by an average of 6.8 percent. This year, however, the city's GDP growth is expected to ease to around 4-5 percent.

And the economic slowdown is unlikely the only factor that will hold back the job market from improving further.

Another will be "uncertainties in the external environment", said Cheung, like "the possible economic impact from the earthquake in Japan and the political unrest in the Middle East".

And Hang Seng Bank's economist Fan sees one other factor that may put companies' hiring on hold - the continued rise in oil prices.

Oil has been trading at around $100 a barrel for some time now, and further rises will tend to translate into further "inflationary pressures in the Asian economies", according to Fan.

The rising costs will either be passed on to end consumers or simply lead to thinner margins for Hong Kong's manufacturers, she reckoned. The latter case, said Fan, will make these employers "more cautious in hiring".

China Daily

(HK Edition 03/18/2011 page2)