Hong Kong's jobless rate has dropped to its lowest level in 10 years and academics predict it will drop further towards the end of the year. Census and Statistics Department figures released yesterday showed unemployment in December-February was 3.3 per cent, down from 3.4 per cent in November-January. The underemployment rate fell from 2.1 per cent to 1.9 per cent. The employment gains came mainly in insurance, welfare and community services, amusement and recreational services, and the restaurant sector. The number of vacancies received by the Labour Department rose by 8.4 per cent to 52,187. Secretary for Labour and Welfare Matthew Cheung Kin-chung welcomed the continued decline in unemployment. 'As stronger seasonal demand abated after the Lunar New Year holiday, any further decline in unemployment and underemployment depended on the growth in total employment relative to labour supply to the corporate sector,' he said. Mr Cheung said the government would monitor the impact of the volatile global financial markets and recent falls in the stock market. Randy Chiu, professor of human resources management at Baptist University, expected the jobless rate would drop to 3 per cent this year. 'More are being hired to work in welfare and community services as social enterprises begin to develop, and more people are buying insurance, creating more jobs in the sector. I think the rate will continue to drop until it reaches 3 per cent near the end of this year,' he said. But he warned that the subprime crisis in the US and policies imposed by Beijing to rein in the economy might have some impact on the city's economic growth. Lingnan University economics professor Ho Lok-sang also predicted the jobless rate would fall further. 'I am quite optimistic. The subprime problem in the US will not affect Hong Kong, as the city's economy is still healthy. I think Hong Kong's economic growth will be about 5 per cent this year,' he said. Professor Ho also noted that the labour force fell from 3,663,900 to 3,652,300 - a drop of 11,600. 'The baby boomers are now in their 50s and 60s, which means many people will retire and leave the workforce. Hong Kong might face a shortage of labour in the next few years as more workers retire,' he said.