Jobless rate dips slightly but fresh storm brewing

Hong Kong's jobless rate slid slightly to 6.3 percent in the September-November period but it is expected to rebound as a survey showed that 14 percent of companies will lay off staff next year.

The unemployment rate fell 0.1 percentage point from 6.4 percent in the August-October period, data from the Census and Statistics Department showed. The underemployment rate also decreased from 3.8 percent in August-October to 3.4 percent in September-November.

The total employment increased by around 0.6 percent from August-October to 3,650,100 in September-November, the number of unemployed decreased by around 13,500 to 244,300, and the number of underemployed also fell by around 14,900 to 133,100.

Over the same period, the labor force also increased by around 0.2 percent to 3,894,400.

Among the various sectors, the unemployment rate in the retail, accommodation, and food services fell 1.1 percentage points to 10.1 percent while the rate in food services fell 1.7 percentage points to 13.1 percent.

Meanwhile, the number Comprehensive Social Security Assistance cases approved in November fell 0.3 percent month-on-month to 224,419, the Social Welfare Department said.

Unemployment cases approved continued to rise, up by 0.3 percent month-on-month and 54 percent year-on-year to 19,079 while the number of applications rose by 8.3 percent to 931 cases in November.

However, given the fourth wave of the local epidemic of late, the pressure on the labor market is likely to increase again in the near term, said Secretary for Labour and Welfare Law Chi-kwong.

The Hong Kong General Chamber of Commerce expects the unemployment rate to reach 7 percent by year-end, following the end of the Employment Support Scheme last month.

Chief executive of the chamber George Leung Siu-kay said the peak of unemployment would be the first quarter next year and expects the number to exceed 7 percent as the unemployment statistic is usually lag-behind. In the end-2021, the unemployment rate is expected to fall to 4.8 percent.

Meanwhile, 14 percent of the companies plan staff cuts in Hong Kong and 55 percent plan to freeze base pay in the next 12 months, an HKGCC survey showed.

The survey was conducted with 314 firm between November 9-13.

For the first 10 months, 62 percent of the enterprises' revenue fell on a year-on-year basis and around 22 percent of the companies' sales plunged over 50 percent or above.

Leung said the results showed companies remain cautious about their future prospects after many were severely impacted by Covid-19 this year.