Unemployment rate hit 15-year high in March-May

The retail, accommodation, and food services sector hit its highest jobless rate since SARS.

Hong Kong’s jobless rate has officially surpassed the global financial crisis, climbing to a 15-year high of 5.9% in March-May, 0.7 percentage points (ppt) higher than the 5.2% recorded in February-April, according to data from the Census and Statistics Department (C&SD).

“The labour market showed further deterioration in March-May 2020 as a wide range of economic activities stayed in the doldrums. The seasonally adjusted unemployment rate increased by 0.7 ppt from the preceding three-month period to 5.9%, surpassing the peak of 5.5% in the aftermath of the global financial crisis to reach the highest in more than 15 years,” noted Secretary for Labour and Welfare Dr. Law Chi-kwong in a C&SD press release.

Total employment shrunk by around 37,900 to around 3.62 million in March-May from 3.657 million in February-April. The labour force also contracted by around 9,900 to 3.85 million from 3.86 million over the same period of comparison.

The consumption- and tourism- related sectors, such as retail, accommodation, and food services led the declines, with the latter reporting a jobless rate of 10.6% in March-May. This is its highest rate of unemployment since August-October 2003, or after the onslaught of SARS, according to Secretary Law.

Unemployment also rose across almost all the major economic sectors, with more distinct increases observed in the construction sector; transportation sector; information and communications sector; education sector; and arts, entertainment and recreation sector.

“[The] unemployment rate for food and beverage service activities rose to 14.8% whilst the underemployment rate stayed elevated at 8.2%. Meanwhile, the situation in the construction sector worsened, with the unemployment rate rising to 10.8% and the underemployment rate to 8.2%. The labour market conditions in many other sectors also weakened, particularly in transportation, information and communications, education, and arts, entertainment and recreation,” added Secretary Law.

Meanwhile, underemployment rate rose to 3.5% in March-May from 3.1% in the preceding three-month period, the highest in close to 17 years. Increases were mainly seen in the retail sector; transportation sector; and warehousing and support activities for the transportation sector.

The labour market is expected to face pressure in the near term, although the pace of deterioration is forecasted to slow down, according to Secretary Law.

"Whilst the local epidemic situation has abated, it will take time for local economic activities to return to normal. The external environment also remains difficult as the pandemic continues to weigh on the global economy. Thus, the labour market will still face pressure in the near term, yet the pace of deterioration may decelerate,” he said.

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