Jobless rate low on brisk growth

Hong Kong's unemployment rate for May-July fell to 4.1 percent, the lowest level since mid-1998, supported by the city's robust economic growth that prompted businesses to hire more workers.

Economists expect the jobless rate to fall further by the end of the year, boosted by a better-than-expected gross domestic product and a higher GDP forecast for the entire year.

Hong Kong's jobless rate may fall below 4 percent by the end of this year as buoyant economic activity will create more jobs, especially in the housing and retail sectors, said Frances Cheung, an economist at Standard Chartered Bank.

The unemployment rate dropped 0.1 percent from April-June to 4.1 percent in May-July, the Census & Statistics Department (C&SD) said early this week. The fall in the unemployment rate was mainly observed in the decoration, maintenance and transport sectors whereas rises were noticed in the amusement and recreational services and real estate sectors.

Total employment rose by 9,000 to an all-time high of 3.49 million during the three-month period. Total labor supply also expanded by 11,200 to a new high of 3.65 million, the C&SD said.

It said the rise in the employment rate was caused by an increased number of first-time jobseekers, comprising mainly fresh graduates and school leavers entering the labor market. But as these new entrants had been largely absorbed into the labor market, the number of jobless rose by only 2,200 to 157,900.

The number of underemployed people grew by 2,300 to 83,500. The underemployment rate rose slightly to 2.3 percent from 2.2 percent over the same period as there was inadequate employment in the amusement and recreational services and sanitary services sector.

Though the jobless rate has remained low in the last two years, the employment rate among people with low or little education is still relatively high, said a Labor Department spokesman.

Hong Kong's economy expanded briskly in the second quarter, with gross domestic product growth accelerating to 6.9 percent over a year earlier, up from a revised 5.7 percent in the first quarter.

Forecast GDP growth for 2007 has been revised to 5-6 percent from 4.5-5.5 percent, while the inflation forecast stays at 1.5 percent, said the government.

(China Daily 08/23/2007 page15)