HK jobless rate at seven-month high
No turnaround in sight as the outbreak is yet to take its toll
Hong Kong's unemployment rate edged up for the second consecutive month in March to 7.5 per cent - the highest level in seven months.
And the rate is set to keep on climbing as the atypical pneumonia outbreak takes a bigger toll on the economy, the government warned.
It said the effects of the outbreak, which first flared in the second half of last month and has wreaked havoc on consumer spending, tourism and travel, have not yet filtered fully through to last month's jobless rate.
'The latest figures have not reflected the impact of the Sars [Severe Acute Respiratory Syndrome] since its outbreak in mid-March,' Secretary for Economic Development and Labour Stephen Ip Shu-kwan said yesterday.
He hinted that the worst was yet to come. 'We envisage that the impact will be more apparent in the second quarter. The retail, restaurant and tourism sectors are likely to face greater pressure,' he said.
Economists agree that the unemployment rate is not likely to get better any time soon.
'We should see much worsening in the second quarter, given that Sars is not showing any signs of abating,' said Prakash Sakpal, an economist at ING Financial Markets. 'It's also worrying that mortality is picking up,' he added, referring to the number of deaths in the past few days.
Nine people in Hong Kong died from the virus yesterday, the highest daily figure to date.
The jobless rate has been climbing since November, when it bottomed out at 7.1 per cent after falling from a record high of 7.8 per cent in July.
Earlier this week, Executive Councillor Cheng Yiu-tong, who is also head of the Federation of Trade Unions, warned that unemployment could go as high as 8 per cent in the second quarter if the outbreak is not brought under control.
Mr Sakpal agreed, saying if the outbreak continued, other sectors, such as exports, would also be hit.
Last month, higher unemployment in the retail, construction, manufacturing and catering sectors more than offset more jobs in wholesale trade, insurance, amusement and recreational services, the government said.
It said the increase in unemployment was more noticeable in the retail and construction sectors after the New Year holidays in February. Shoppers tend to spend more on gifts in the run up to the holidays and then cut back.
The number of people out of work last month rose by 4,100 to 260,000, while those working fell 5,200 to 3.24 million.
The underemployment rate, which measures the number of people working 35 hours or less a week, held firm at 2.9 per cent.