Jobless rate is the lowest for 3 years

PUBLISHED : Wednesday, 19 January, 2005, 12:00am
UPDATED : Wednesday, 19 January, 2005, 12:00am

The number of people employed rises to a new high of almost 3.33 million

Hong Kong's jobless rate improved to a better-than-expected 6.5 per cent last month, the lowest level in almost three years.

The consensus estimate was 6.6 per cent against the previous month's 6.7 per cent.

'It's an upbeat figure, but doesn't necessarily signal a change in the trend,' JP Morgan economist Ben Simpfendorfer said.

The number of unemployed fell by about 9,200 to about 227,000, also the lowest level in 35 months.

The number of people in employment rose to a new high of almost 3.33 million, 20,400 more than in the previous month.

Cautioning that more needed to be done to lower the jobless rate, Financial Secretary Henry Tang Ying-yen reiterated that roughly 10,000 short-term contract government jobs should be continued at a cost of $700 million.

Approval for the spending will be sought from the Legislative Council's Finance Committee.

Chief Executive Tung Chee-hwa vowed in last week's policy address to focus on job creation during the next 12 months.

Mr Tang said the construction sector remained one of the hardest hit.

More private-sector projects were needed to alleviate the industry's long-term plight, he said.

A government spokesman said: 'The new initiatives announced in the 2005 policy address to speed up the urban renewal process and improve the maintenance and management of old buildings will create employment opportunities in construction, property management and related industries in the next few years.'

Figures released yesterday by the Census and Statistics Department indicate that the underemployment rate - which measures the number of people who cannot find more than 35 hours of work a week - also dipped slightly to 3.1 per cent from 3.2 per cent.

This represents a drop of roughly 1,900 people to 111,000.

Much of the new hiring took place in the wholesale, restaurant and catering trades, as well as business services and the hotel sector, the government spokesman added.

Job vacancies received at the Labour Department in December totalled 24,589, taking the figure for 2004 to a record high of 297,186.

Mr Simpfendorfer said that robust holiday spending over Christmas was likely to extend to the Lunar New Year break in the second week of next month.

This would continue to provide good news for Hong Kong's jobless as the demand for labour would remain buoyant, especially in the retail and tourism-related sectors, he said.

'The real test will be in March, as holiday spending drops and the retail and trade sectors go through a quiet period,' Mr Simpfendorfer said.

'I don't think the unemployment rate will fall below 6 per cent this year.'