Jobless rate climbs to five percent

Unemployment in Hong Kong has risen to its highest level in nine months, official data showed on Thursday.

The city’s jobless rate climbed to five percent in March, up from 4.5 percent the month before.

Underemployment also edged up, by 0.8 percentage points, to 3.1 percent.

The government said the job market worsened in almost all major economic sectors, especially in construction, retail, accommodation and food services, as well as arts, entertainment and recreation.

“The labour market was under severe pressure amid the fifth wave of local epidemic,” said Labour Secretary Law Chi-kwong.

While the labour market will still be subject to pressure in the near term, Law said, with the easing of the local epidemic situation of late, together with the launch of a new round of consumption vouchers, business for consumption-related sectors should gradually improve.

An economist said he expects the jobless rate to rise further to 5.2 percent, before reversing course.

“Things haven’t really improved that much in most of April and therefore it’s quite likely that a lot of employers may still be rather conservative in terms of employing more people,” explained Gary Ng, an APAC economist for Natixis.

But he forecast that the unemployment rate could come down to 3.2 percent if the phased lifting of social distancing curbs continues.

“If we talk about the external environment, it’s not as bad as before, and for the domestic environment it’s really about the restrictions, and if this biggest hurdle is actually lifted or relaxed, I think in the later [part] of 2022 it’s quite likely that we will see an improvement in the labour market.”