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Residents fill out forms at a job fair organised by the Labour Department. Photo: May Tse

Hong Kong’s jobless rate drops to 3.1 per cent, marking 12th straight decline as city seeks post-Covid economic recovery

  • Further improvements in job market expected amid tourism revival and disbursement of consumption vouchers, labour chief Chris Sun says
  • But experts warn declining workforce needs attention, call for import of workers to ease shortages in some sectors
Hong Kong’s jobless rate dropped to 3.1 per cent in the January to March period, marking a 12th consecutive decline and signalling the city is on track to post-Covid normality.

About 115,100 people were out of work, while total employment increased slightly by 3,900, from about 3.65 million during the December to February period, the Census and Statistics Department revealed on Monday.

The unemployment rate fell 0.2 percentage points compared with the rolling three-month period from December to February, hitting the lowest level since the September to November interval in 2019, when it was also 3.1 per cent.

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The figure has been declining since 5.4 per cent was recorded in the three months ending in April last year.

The latest underemployment rate was 1.2 per cent, down 0.1 percentage points.

Secretary for Labour and Welfare Chris Sun Yuk-han said there were more positive developments to come.

“The labour market should improve further with the continued revival of domestic economic activity and inbound tourism. The disbursement of the new batch of consumption vouchers this month will also help,” Sun said.

The combined unemployment rate of consumption- and tourism-related sectors such as retail, accommodation and food services declined by 0.1 percentage points from the preceding three-month period to 4.2 per cent.

A resident browses a brochure at a job fair held last month. Photo: May Tse

Improvements were also noted in sectors such as wholesale and building decoration, repair and maintenance.

The jobless rates of those two sectors reached 2.8 per cent and 6.4 per cent, respectively, down from 3.6 per cent and 6.9 per centin the previous three-month period.

The transport sector also recorded a modest drop from 3.2 per cent to 3.1 per cent.

Dr Thomas Yuen Wai-kee, an assistant professor at Shue Yan University’s department of economics and finance, said he expected the unemployment rate to continue falling in the months to come as the economy picked up.

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“By June, we could possibly see the jobless rate fall below 3 per cent,” said Yuen, who also estimated it could dip as low as 2.5 per cent by the end of the year.

“It can be said that we are approaching full employment. We may have to think of ways to increase our workforce or productivity, such as increasing pay to attract people to work, using more automation to save manpower, or importing workers,” he said.

Dr Billy Mak Sui-choi, an associate professor at Baptist University’s department of accountancy, economics and finance, warned of the decline in the workforce over the years.

Hong Kong last year suffered its biggest drop in the working population since records began in 1985, losing more than 94,000 employees. The figures brought the number of workers who quit the labour force in the past four years to 220,500.

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“Despite a slight increase in total employment this time, Hong Kong is still very much short of workers. Import of workers is needed for some sectors, like catering or retailing, otherwise quality of services and thus our competitiveness could fall,” Mak said.

City leader John Lee Ka-chiu earlier acknowledged there was a need to import workers and said he would prioritise addressing a shortage of labour in the construction and transport sectors, with the aim of devising strategies by the middle of the year.

Meanwhile, the number of cases under the government’s Comprehensive Social Security Assistance scheme fell by 838 from the month before to 205,592 in March. Unemployment cases in that period decreased 0.5 per cent to 17,823, according to the latest figures released by the Social Welfare Department on Monday.

The city’s economy was hit hard by the Covid-19 pandemic last year, resulting in a 3.5 per cent decrease in gross domestic product in real terms.

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But economic activity began to revive after Hong Kong lifted all Covid restrictions and social-distancing measures from March 1 this year.

Tourists have also been returning to the city. Provisional figures by the Hong Kong Tourism Board showed arrivals in March reached 2.45 million, a 68 per cent increase from the previous month.

For the first three months of this year, Hong Kong recorded 4.41 million inbound visitors, or 30 per cent of the average quarterly figure before the pandemic.

Earlier this month, the government also launched the latest round of the consumption voucher scheme to help boost domestic spending, handing out the first instalment of HK$3,000 (US$382) to eligible residents. The second batch of HK$2,000 is expected to be available in July.

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