Hong Kong jobless rate hits 10-year high, government extends Covid-19 social distancing measures

The unemployment woes are being worsened by reduced recruitment of university graduates.
The unemployment woes are being worsened by reduced recruitment of university graduates.PHOTO: EPA-EFE

HONG KONG - Hong Kong's unemployment rate hit 5.2 per cent in April - the seventh straight month of increase and the highest in over a decade - as the pandemic continues to batter an economy already in recession.

This rate, which is for the period Feb 1 to April 30, is up from the average of 4.2 per cent recorded in the three months to Mar 31, the Census and Statistics Department on Tuesday (May 20) said.

The underemployment rate is up as well, adding one percentage point to 3.1 per cent in April - the highest in over 15 years.

The number of jobless went up 40,300 to 202,500 as at Apr 30, while the level of underemployed rose by about 35,800 to 118,600.

Total employment fell by about 62,600 to 3.66 million in April.

The labour force shrank by about 22,400 to 3.86 million over the same period.

Secretary for Labour and Welfare Law Chi Kwong noted the labour market showed further sharp deterioration as the Covid-19 pandemic continued to weigh on a wide range of economic activity.

"The year-on-year declines in total employment and labour force widened further to 5.4 per cent and 3 per cent respectively, both the largest on record," he said.

Mr Law said the unemployment rate of the consumption- and tourism-related sectors such as retail, accommodation and food services hit 9 per cent - the highest in more than 15 years.

 
 
 

The underemployment rate for these sectors also went up to a record 5.9 per cent.

Labour market conditions in most other sectors also deteriorated, particularly in education, information and communications, professional and business services (excluding cleaning and similar activities), the arts, entertainment and recreation.

"The labour market will continue to face immense pressure in the near term," warned Mr Law, who added that the government "has rolled out relief measures of unprecedented scale" which should help workers keep their jobs.

The unemployment woes are being worsened by reduced recruitment of university graduates as businesses struggle to stay afloat.

The latest data ties in with the bleak outlook painted by Ms Annie Yau, chair of the Hong Kong Retail Management Association.

She estimated in a Bloomberg article that a quarter of the 62,400 retail shops, from mom and pop stores to luxury boutiques, could disappear by December if sales do not improve.

Most landlords being willing to cut rents by 10 to 20 per cent, far from the retail industry's demand of 50 per cent or more, Ms Yau said.

Hong Kong's gross domestic product (GDP) suffered its worst decline in the first quarter, contracting 8.9 per cent from a year earlier. Full-year GDP is expected to shrink by between 4 and 7 per cent.

The news come as the Hong Kong government on Tuesday announced the extension of existing social distancing rules, including the ban on gatherings of more than eight people, until June 4, which is the day of the annual vigil marking the Tiananmen crackdown.

The number of new coronavirus infections broke a 23-day streak without local cases, prompting Chief Executive Carrie Lam on Tuesday morning to urge the public to remain vigilant while she dismissed allegations that the extension was meant to suppress protests and is a result of political considerations.

 
 
 

Religious gatherings are now exempted from the eight-people ban but there can be no food and drinks.

Karaoke lounges, night clubs and party rooms will remain shut until May 28.

Food and Health Secretary Sophia Chan said the ban on other gatherings was extended as a local cluster of infections was found in Tsuen Wan last week. She added that more tests will be conducted as the measures ease.

The total number of confirmed coronavirus cases stands at 1,055, including four deaths.