Bright news for Hong Kong jobs


Hong Kong is in the midst of grappling with its second recession in four years

Staff and wires

HONG KONG, China -- Hong Kong's beleaguered economy has received a spot of bright news, with the government saying the territory's jobless rate has fallen from a record high.

On Tuesday, the government said the jobless rate had fallen to 7.6 percent in the June-August quarter, after reaching an unprecedented 7.8 percent in the three months ending in July.

The news surprised analysts surveyed by Reuters news agency -- who had forecast a new record of 7.96 percent -- and offered hope to Hong Kong's battered economy, which is grappling with its second recession in four years.

Laid-off staff, graduates and school leavers had swelled the number of job seekers in past quarters, leading to one of the highest jobless rates in Asia.

It is the first time in the past year that the jobless rate has bucked an upward trend, according to a government spokesperson, who added they are keeping an eye on whether the economy picks up to see if this drop would last.

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"It's surprising and good news," Paul Tang, an economist at Bank of East Asia, told Reuters.

"Total employment surpassed an increase in the labor force so it is evidence for optimism."

Hiring was most noticeable in the construction, trade, business services and sanitary services sectors, offsetting job losses in the financial, restaurant and real estate sectors.

Hong Kong's total labor force expanded by 11,500 in June-August, due in part to more school leavers and graduates looking for work, but the total number of employed increased by 12,500.

The trade sector in particular is picking up as exports rebounded in recent months and economists hope that will filter through to create more jobs.

But Hong Kong's fledgling export-led recovery is fragile given that any U.S. double-dip recession would hurt local employers, analysts told Reuters.

Companies that have cut staff recently include the SCMP Group, publisher of Hong Kong's biggest English-language newspaper the South China Morning Post, and U.S. investment house Merrill Lynch.

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The government is eyeing the tourist industry for job growth

In a bid to boost the economy, the government has renewed its pledge to combat unemployment through programs such as its youth work-experience scheme.

In July, Hong Kong began a crackdown on illegal employment, which led to the arrest of 500 people.

The small territory on China's east coast is also trying to boost its infrastructure, by supporting businesses, particularly those in the tourist sector.

The government spokesman said he expected 5,000 new jobs would be created in the next three years in the hotel industry alone.

Reuters contributed to this report.