The number of unemployed fell by 18,700 to 190,400 in the August-October period from 209,100 in July-September, according to the Census and Statistics Department.

That means a jobless figure of 5.2 percent against the previous 5.3 percent.

Secretary for Labour and Welfare Matthew Cheung Kin-chung said the near-term outlook would depend mainly on the pace of economic recovery and job creation.

"A sustained and solid recovery still hinges on a fundamental improvement in the external environment," Cheung said. "We will remain vigilant and continue to monitor closely the labor market situation."

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Unemployment rates fell in all sectors during the period. And the jobless rate of youths aged from 15 to 19 dropped notably by 3 percentage points to 22.7 percent.

Following the government's efforts to create jobs in the construction sector, its jobless rate has continued to fall, with the latest at 7.9 percent, down by 1.5 percentage points. The decoration and maintenance sub-sector slid markedly by 2.2 percentage points to 8.6 percent.

But total employment in Hong Kong declined by around 7,200 to 3,488,300 in the August-October period. "The unemployment rate may not continue to fall as declining employment figures show a decrease in the number of new jobs," said Hang Seng Bank (0011) senior economist Irina Fan Yuen-yee. She said the lower rate only shows that the government's infrastructure projects to generate jobs are taking effect.

Export business continues to be bad as demand from the United States and Europe remains subdued.

Fan said the jobless rate may rise slightly by the end of this year.

But JPMorgan said the constructive outlook on the global manufacturing sector would impact regional trade positively, benefiting Hong Kong.