Surveys show more signs of contraction
Hong Kong's tight labour market may start to slacken in response to signs that the broader economy is continuing to lose steam, data released yesterday suggest.
A Hong Kong purchasing managers' index (PMI) compiled by HSBC and Markit showed business conditions in the city worsened for the fourth month in a row last month.
At the same time, an index compiled by recruitment consultancy Robert Walters showed local hiring activity from July to September remained largely in line with levels in the second quarter.
Last month's PMI reading of 48.7 points suggests operating conditions for private-sector firms worsened from October, when a reading of 49 was reported.
Anything above 50 signifies growth, while a reading below 50 points to a contraction.
The Hong Kong PMI survey, which covers about 300 companies from sectors including manufacturing, services, retail and construction, suggested the local employment situation continued to cool marginally but most firms saw their hiring levels basically unchanged.
'While business activity in Hong Kong is still slowing, it hasn't collapsed,' HSBC Greater China economist Donna Kwok said.
'With the job market and domestic demand holding up better than during the last downturn of 2008 and 2009, the city's growth fundamentals are in stronger shape than before,' Kwok added.
Hong Kong entered its last recession in 2008 with the unemployment rate at a decade-low of 3.1 per cent.
During the subsequent downturn, local unemployment peaked at 5.9 per cent in August 2009. It has fallen progressively since then, to the near-term low of 3.3 per cent reported in October, the most recent data available.
At the same time, retail sales remain robust, buoyed by a 23.7 per cent rise in mainland tourist arrivals in the first 10 months, to 22.93 million visitors. Sales rose 23.1 per cent in value in October and 25.2 per cent in the first 10 months.
But signs are emerging in some sectors that the local labour market may be feeling the initial impact of global economic headwinds.
Recruitment advertising rose 2.9 per cent in the third quarter from the second quarter, and 10.5 per cent from a year ago, according to the Robert Walters survey data.
But demand for roles in accounting, finance and IT is softening, and hiring activity is beginning to stagnate as companies face declining levels of new business and employees become reluctant to change jobs amid growing signs of a slowing global economy.
'While roles in human resources and sales remain buoyant, both companies and clients across many sectors have started to take into account the effects of global economic uncertainty, particularly in the US and Europe, China's biggest export markets,' Robert Walters Hong Kong managing director Matthew Bennett said.