19 August 2002

The latest unemployment figures for the May-to-July three months have confounded the pessimists, revealing a marginal increase in the unemployment rate to 7.8 per cent from 7.7 per cent in the preceding April-to-June period.

More surprising still in the today’s numbers was a quite significant increase in the number of people employed, with 24,300 people acquiring jobs in the latest three months, lifting the total number in employment to 3.22 million from 3.19 million.

It is still too early to suggest the current round of increases in unemployment is coming to an end, however, with the economy weak and the available labour force growing rapidly as a result of new graduates and school leavers entering the market. Some of the jobs created may also prove to be of a temporary nature, but at least the lift in those in employment gives some room for optimism.

The real test will come in the next few months when it will become clearer whether the economy is turning around and therefore can absorb the workforce increases, and whether the Government and private sector job initiative programs do their work.

The "One Company One Job" campaign initiated by the Chamber and five other business associations has just been launched and therefore would not affect the unemployment figure just published. We should see the positive effect in a couple of months. However, we realize that though this campaign will be most welcomed by the new graduates, it does not address the fundamental unemployment problem in Hong Kong.

The latest figures show the available labour force actually increased by 35,900 in the May-to-July three months, lifting the total number of people in the labour force to almost 3.5 million from 3.46 million in the previous April-to-June period.

Despite the improvement in the employed numbers, therefore, there was still a big increase in those without jobs, with 12,400 persons joining the unemployed ranks and lifting the total number of unemployed to 275,000 from 263,400. This is another record under the current method of measuring unemployment and puts the numbers unemployed well ahead of where they stood a year ago.

In the past 12 months, unemployment has increased to the present 7.8 per cent from 4.7 per cent and the actual number of people out of work is up 114,200 at 275,000 compared with 160,800 in May-to-July last year. Over the same period the workforce has increased by 79,300 – almost half of that coming in the latest three months – to almost 3.5 million from 3.42 million and those in employment has dropped 34,900 to near 3.22 million from 3.26 million.

For further information, contact: Ian K Perkin, Chief Economist, 2823-1242