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 15 November 1999 Economic Recovery Still Too Slow to Absorb Labour Force Increase Comment by the Chamber Chief Economist, Ian K Perkin, on today's preliminary unemployment numbers for August-to-October 1999. Unemployment continues to creep higher despite the apparent recovery in the local economy in recent months. In the three months to October, there were 226,000 people out of work compared with 223,900 in the previous three months and 188,700 a year ago. At the same time, the seasonally adjusted unemployment rate edged up to 6.2 per cent from 6.1 per cent previously and 5.2 per cent a year ago. The simple fact of the matter is that despite a return to positive economic growth since the second quarter of the year, employment growth has not been able to keep pace with the growth in the total available labour force. In the past 12 months, the number of people employed in Hong Kong has actually increased by 61,700, but the labour force has increased by 99,000. This has resulted in another 37,300 people being added to the ranks of the unemployed over the same period, despite the economy coming out of the recession brought on by the Asian financial crisis. The increase is a disturbing trend, but helps explain the rationale behind the need to restrain costs, including wages, if the SAR is to enhance its competitiveness, attract new investments and industries and create new jobs. Wage and salary costs will need to be kept under control if new entrants to the labour force are to be able to find jobs and a sustained improvement in employment numbers achieved. For further information, contact Ian K Perkin on 2823-1242
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