Hong Kong jobless rate drops to 2.9 per cent in second quarter, first time below 3 per cent in 4 years and signals return to full employment
- Unemployment rate falls to four-year low between April and June, lowest since before the pandemic hit in 2020
- Ho Kai-ming, acting labour and welfare secretary, predicts unemployment will continue to fall on the back of a bounce back in the economy
Hong Kong’s jobless rate hit a landmark with a fall to 2.9 per cent between April and June – the first time the unemployment figure has dropped below 3 per cent since four years ago, before the coronavirus outbreak, and a signal the city has returned to full employment.
Figures from the Census and Statistics Department released on Tuesday showed that the rolling total was down 0.1 percentage points from March to May, which marked a sustained economic recovery since the city removed all Covid-19 restrictions in February.
“The labour market should improve further in the coming months as the economic recovery gathers further strength,” he said.
The latest jobless rate is the lowest since pre-pandemic 2019, when it reached 2.9 per cent in the April to June period.
The up-to-date underemployment rate was 1.1 per cent, down 0.1 percentage points.
About 113,600 people were out of work, but total employment increased by 15,400, from about 3.78 million to 3.8 million during the March to May period.
The unemployment figure has been on a downward trend since 5.5 per cent was recorded at the end of the first quarter last year.
Marked improvements were also recorded in the arts, entertainment and recreation sector, where unemployment fell by 0.9 percentage points from 4.2 per cent to 3.3 per cent.
Economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at Chinese University, agreed the latest jobless figures reflected that Hong Kong had achieved full employment – but that the numbers highlighted an underlying problem.
“This is caused by an exodus of people who have emigrated to other countries. This signals a lot of challenges for Hong Kong as it grapples with insufficient talent and lack of skilled workers,” explained.
Lee warned the city’s economic recovery might be affected because of the lack of talent and labour.
“Employers will be forced to increase wages to attract people, pushing up their operating costs and, as a result, impeding economic growth.” he predicted.
The government announced plans last month to import 20,000 workers to ease a labour crunch in the construction, aviation and transport industries under a special scheme that will bypass vetting by union leaders as Chief Executive John Lee Ka-chiu said the city had lost about 200,000 people from its workforce in the past few 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.
Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, also said the low jobless rate reflected some hidden problems.
“The economic recovery is not so robust. The retail sector has rebounded, but exports have continued to face downward pressure,” he said.
“It shows that the labour force participation rate is not satisfactory, leading to a low jobless rate,” Ng explained.
“Amid the outflow of people, the city’s employers will continue to have problems hiring people.”
