Hong Kong's Jobless Rate Eases To 6.8 Percent

Hong Kong's unemployment rate fell to a better-than-expected 6.8 percent in the first quarter of 2021, from 7.2 percent in the three months to February, as some of the territory’s hardest-hit sectors rebounded somewhat as the coronavirus situation eased.

New government data showed a fall of 0.4 percentage points in the jobless rate for Hong Kong’s consumption- and tourism-related sectors, to 10.7 percent.

And Labour Secretary Law Chi-kwong said improvements were seen in the retail, accommodation, and food services sectors.

"The labour market was under notable pressure in the first quarter of 2021, but the situation stabilised in the latter part of the quarter as the fourth wave of the local epidemic receded," he said.

But Law warned that the labour market still faces challenges in the short term, noting that the pace of recovery is “uneven across sectors and inbound tourism remains in the doldrums.”

Gary Ng, an Asia Pacific economist at Natixis, agreed that easing of the Covid-19 situation here was the key to the improved figure.

“This fall in the unemployment rate pretty much is a result of the loosened containment policies from the government basically back in February and also because of the fewer Covid cases after this peak in January as well," he said.

But Ng said there were still some trouble spots, noting that some sectors, including transport and insurance, logged a rise in unemployment.

"These are some of the sectors that are still affected by this halt in mobility by the cross border movement," he explained, warning that the pressure on the economy is "not fading away."

Nonetheless, he expects the jobless rate to continue falling to around six percent by the end of the year – if more people get vaccinated and the epidemic situation stays under control.

"Of course it is still a rather high level if you look at some of the past experience comparing to the global financial crisis," he said.

"So I do think that government still needs to provide more support to the sectors that have been affected more by the Covid-19 [pandemic]."