Jobless rate reaches 16-month high and likely to get worse
Unemployment jumped to a 16-month high in the last quarter of last year as the city's labour force continued to expand faster than the number of jobs.
The Census and Statistics Department said yesterday that Hong Kong's seasonally adjusted jobless rate climbed to 4.1 per cent during the last three months of the year, from 3.8 per cent between September and November. It was the first time since August 2007 that the rate had exceeded 4 per cent.
The jump prompted Chief Executive Donald Tsang Yam-kuen to warn that rising unemployment was one of the biggest risks to the city's economic recovery.
About 4,900 people joined the ranks of the unemployed as the number of people entering the labour force continued to exceed the number of new jobs created.
While there are now a record 3,685,700 people in the labour force, the economy's capacity to employ them is slipping. Total employment growth fell to 0.3 per cent in the last quarter of last year, from 0.7 per cent between September and November and 1.5 per cent between August and October.
Morgan Stanley predicted yesterday that the unemployment rate would exceed 6 per cent later this year.
Speaking at the opening of the Asian Financial Forum in Hong Kong yesterday, Mr Tsang said he expected more than 60,000 new jobs would be created this year, mostly through fast-tracking government infrastructure projects.
'We have a long and difficult road ahead of us in terms of economic recovery,' he said, adding a recovery 'will depend on how the global economy responds to various stimulus packages and economic policy put in place to tame the financial turmoil'.
But Morgan Stanley's analysts did not believe the government's works programme would do much to fix the employment situation.
'We note the high import content of infrastructure construction in Hong Kong, so there could be considerable leakage and hence limited multiplier effect from the HK$29 billion that the government will spend,' its report said, noting that the new jobs might not be a good fit for the people now finding themselves out of work.
'We see limited support to job and income growth from the government projects, and expect further deterioration in labour-market conditions ahead.'
Mr Tsang said he expected Hong Kong's economy would have shrunk in the final quarter of last year and would continue to do so in the first half of this year. But he was confident the city would recover quickly.
Secretary for Labour and Welfare Matthew Cheung Kin-chung called on employers yesterday to explore measures other than cutting staff to weather the turmoil.
In December, the Labour Department recorded 42,758 private-sector vacancies, down 4.2 per cent from the 44,647 in November.
Secretary for Financial Services and the Treasury Chan Ka-keung said it was difficult to predict how high the jobless rate would rise, while Peter Wong Tung-shun, an executive director of Hongkong and Shanghai Banking Corp, said the city would be lucky if unemployment for the year could be kept under 5 per cent.
