Hong Kong’s unemployment rate saw a slight decrease in the August to October period, falling to 3.8%-the first decline in over two years [[1]].While this represents a positive shift after a prolonged period of pandemic-related economic challenges, labour union representatives urge caution, citing ongoing issues within key sectors. This report details the nuanced recovery, exploring improvements in construction and food & beverage alongside concerns about project gaps and wage stagnation.
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Hong Kong’s unemployment rate edged slightly lower in the August to October period, falling to 3.8% from the previous period. This represents a 0.1 percentage point decrease, with the number of unemployed individuals declining by approximately 6,000 to nearly 150,000. The construction and food and beverage sectors saw the most significant improvements, with unemployment rates falling by 0.4% and 0.2%, respectively. While the figures offer a glimmer of hope, some industry representatives caution against interpreting the data as a definitive sign of economic recovery.
According to the Construction Site Workers General Union, despite the marginal decrease in unemployment within the construction sector, rates remain relatively high. “It’s difficult to say whether the market is showing signs of recovery,” said Zhou Sijie, Chairman of the Construction Site Workers General Union. He explained that the industry is currently grappling with a significant “project gap” due to a substantial decline in private construction projects this year, disproportionately impacting workers involved in preliminary stages.
Zhou expressed concern that if the current trend continues and sufficient new projects don’t emerge, even workers involved in later-stage processes, such as electrical and mechanical installations, could face job losses by the end of the year or early next year, potentially leading to a further increase in the unemployment rate. He acknowledged that the development of the Northern Metropolis offers some optimism for the industry, but emphasized that these projects are still in their early stages, stating, “distant water cannot quench immediate thirst.”
The Catering and Food Allied Workers Union echoed similar sentiments. Zhao Guancheng, a rights officer with the union, noted a recent decrease in large restaurant closures, contributing to the slight improvement in the industry’s unemployment rate. However, he added that the overall proportion of unemployed workers remains relatively high. He also highlighted ongoing issues with wage arrears and delayed payments within the sector, warning that the situation could worsen if the economy slows down. “It’s now easier for frontline workers to find jobs, but most of the available positions are lower-level roles with lower wages, making it difficult to attract new talent,” Zhao said.
The latest unemployment rate of 3.8% for the period of August to October marks the first decline in Hong Kong’s unemployment figures in over two years, since the May to July 2023 period. Compared to the July to September period this year, the total labor force decreased by approximately 7,800 to 3.822 million, while the total number of employed individuals also fell by around 1,800 to 3.673 million. However, the number of unemployed individuals saw a more noticeable decrease, falling by approximately 6,000 to around 150,000. Simultaneously, underemployment slightly worsened, with the number of underemployed individuals increasing by about 800 to 60,800.
Across various economic sectors, unemployment rates generally declined, suggesting a modest recovery. The retail, accommodation, and food services industries, which were severely impacted by the pandemic, saw their unemployment rate fall from 5.9% to 5.5%. The professional and business services sector (excluding cleaning and similar activities) also experienced a decrease, with its unemployment rate dropping from 4.1% to 3.8%. In the construction sector, unemployment in foundation and superstructure works fell from 7% to 6.7%, while the financial services sector saw a slight decrease from 2.9% to 2.6%. These sector-specific improvements suggest a broader, albeit tentative, stabilization of the labor market.
