In this Feb 24, 2020 photo, shops in Hong Kong’s popular tourist district of Tsim Sha Tsui remain closed amid a raging novel coronavirus outbreak. (PARKER ZHENG / CHINA DAILY)
HONG KONG - Hong Kong’s unemployment rate has soared to a nine-year high as the local retail and catering sectors took the brunt of the coronavirus pandemic.
The number of people out of a job from January to March this year surged to 4.2 percent — up from 3.7 percent for the three months up to February 2020 — while the underemployment rate for the same period climbed from 1.5 percent to 2.1 percent, according to Census and Statistics Department data released on Monday.
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The city’s jobless rate had gone up gradually from 2.8 percent in June last year to 3.7 percent in February — an almost 1 percentage point hike in eight months.
Financial Secretary Paul Chan Mo-po warned over the weekend that both the unemployment and underemployment rates have shot up.
The labor market will continue to face significant pressure from the economic fallout from the pandemic in the near term. Some specific measures, particularly, the Employment Support Scheme and various types of support for specific sectors, should help keep workers in employment.
Law Chi-kwong, HK's secretary for welfare and labor
The unemployment rate and underemployment rates from January to March this year rose across almost all the major economic fronts, with more distinct increases seen in the construction, education, transportation, retail, accommodation and food-services sectors.
The combined jobless rate in the consumption and tourism-related sectors (retail, accommodation and food services) soared to 6.8 percent — the highest since the period from August to October 2009 in the aftermath of the global financial crisis — while the underemployment rate rose to 3.9 percent, the highest since June to August 2003, following the SARS outbreak.
“The labor market will continue to face significant pressure from the economic fallout from the pandemic in the near term. Some specific measures, particularly, the Employment Support Scheme and various types of support for specific sectors, should help keep workers in employment. The government will monitor the developments closely, including the progress and effectiveness of the various relief measures,” Secretary for Welfare and Labor Law Chi-kwong said on Monday.
The situation in the food-and-beverage service sector was especially severe, with the unemployment and underemployment rates surging to 8.6 percent and 5.4 percent, respectively.
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For the construction industry, the unemployment and underemployment rates went up drastically to 8.5 percent and 7.1 percent, respectively, as construction activities slowed.
The unemployment and underemployment situation also worsened in the transportation and education areas.
The Hong Kong Retail Management Association estimates that 5,200 retail shops might have closed down, while 10,400 out of some 292,600 workers in the retail business might have been laid off from February to May.
The Hong Kong Retail Management Association estimates that 5,200 retail shops might have closed down, while 10,400 out of some 292,600 workers in the retail business might have been laid off from February to May
In the worst-case scenario, an additional 15,200 retail shops, or 24.3 percent of the city’s retail shops, are expected to shut by the end of this year. The estimates, however, do not take into account the support from the second round of the Anti-epidemic Fund (AEF).
The Legislative Council last week approved the second round of relief measures worth HK$137.5 billion ($17.6 billion) to safeguard jobs and support enterprises.
“However, taking previous recessions as reference, loan quality and unemployment tend to worsen after the crisis peak. The same may be true in this crisis. Even with government support, some small and medium enterprises may still go out of business should the pandemic last longer and the economy take a longer period to recover,” Singaporean lender OCBC Bank has warned.
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The Chinese Manufacturers Association of Hong Kong, which represents more than 3,000 member companies from various industries and trade, said it expects the jobless rate to shoot up rapidly in the second and third quarters of this year, and the worsening labor market to linger until mid-2021.
About 162,200 people in Hong Kong were unemployed between January and March this year, while the number of underemployed soared to 82,800 during the same period.
US-based credit rating agency S&P Global Ratings said unemployment among local SMEs is deemed to be concentrated in the retail and hospitality industries while, across the Asia Pacific, the number of people unemployed would rise by more than 3 percentage points — twice as high as that of an average economic recession.
