Economists predicted that unemployment figures released today would show an increase to about 5.6 per cent, while a respected brokerage house said the rate could hit a record 7.5 per cent next year.
The gloomy forecasts, which one analyst partly blamed on the impact of the September 11 terrorist attacks, came as senior officials called for companies to consider other options before sacking staff.
Professor Francis Lui Ting-ming, director of the Centre for Economic Development at the Hong Kong University of Science and Technology, said there had been a steep increase in unemployment in September, which would badly affect today's figure - the average rate for the three months to October 31.
'The impact of the September 11 incident will surface by sectors during different stages, with the tourism industry already at the forefront,' he said.
Predicting a rise in the jobless rate today from 5.3 per cent to 5.5 or 5.6 per cent, Professor Lui said the export industry would follow tourism's decline from next month once North American orders started drying up.
City University finance and economics professor Charles Li Kui-wai also predicted a rate of 5.6 per cent, blaming restaurant closures, lay-offs by investment companies and a flood of university graduates seeking work.