Hong Kong unemployment falls to 13-year low

HONG KONG: Hong Kong said Tuesday its unemployment rate has fallen to its lowest in more than 13 years thanks largely to a strong local economy, but analysts warned the figure could rise again.

The unemployment rate for the June-August period fell to 3.2 percent, from 3.4 percent in the May-July, which marked Hong Kong's lowest jobless rate since February 1998, the Census and Statistics Department said.

The figure was below the average 3.5 percent unemployment rate forecast in a poll of seven economists by Dow Jones Newswires.

The total number of people in jobs in the June-August period rose by around 10,800, to 3,636,600 people -- a record high for the Chinese city of seven million people.

However, Labour and Welfare Minister Matthew Cheung said a similar increase is unlikely for the rest of the year as employers become more cautious about hiring, amid the deepening European sovereign debt crisis and weak US economy.

"The oomph in August's strong job market data proves that the impact of cooler Western demand has yet to hit Hong Kong's job market," Donna Kwok, an analyst at banking giant HSBC said in a statement.

"Although turbulence in global financial markets has started to affect local business sentiment, the impact may take longer than usual to feed through this time," she added.

HSBC said earlier this month that as part of its global cost-cutting drive it will slash up to 3,000 jobs in Hong Kong over the next three years, as it shifts focus to fast-growing market.

Hong Kong unemployment peaked at 5.5 percent in mid-2009 as it was pounded by the global financial crisis, but the territory's export-oriented economy has since posted a strong recovery.

Copyright AFP (Agence France-Presse), 2011