Hong Kong’s jobless rate surged to 5.2 percent during the February-April period, as the city felt the full force of its virus-control measures on the back of months of social unrest that had already plunged the local economy into recession.
The seasonally adjusted unemployment rate released on Thursday was the highest in over 15 years, rising from 4.2 percent recorded in January to March.
The underemployment rate, which measures those who only work a few hours each week, also increased to 3.1 percent during the same period, according to the Census and Statistics Department.
Since the pandemic is still full of uncertainties, more small and medium enterprises may be forced out of business in the second half of this year as fiscal stimulus measures are not unlimited whereas the demand shock may persist
Carie Li, economist at OCBC Wing Hang Bank
Tourism and sectors that hinge on consumption bore the brunt of the recession, as the combined jobless rate of the retail, accommodation and food services sectors soared to 9 percent — the highest in more than 15 years. The underemployment rate for these sectors rose to 5.9 percent — the highest on record.
Secretary for Labour and Welfare Law Chi-kwong said on Tuesday that the labor market would continue to face "immense pressure" in the short term.
"To preserve the vitality of the economy, the government has rolled out relief measures of an unprecedented scale, including a series of measures for job retention and job creation. These should help keep workers in employment and the government will closely monitor the situation," Law said in a statement.
OCBC Wing Hang maintained its earlier estimate that the local unemployment rate will top 5 percent in the coming months, while its economist Carie Li predicted that more enterprises may suffer in future.
“Since the pandemic is still full of uncertainties, more small and medium enterprises may be forced out of business in the second half of this year as fiscal stimulus measures are not unlimited whereas the demand shock may persist,” Li said.
Chief Executive Carrie Lam Cheng Yuet-ngor reiterated on Tuesday the government’s pledge to support local businesses while meeting reporters before the weekly Executive Council meeting.
The government has received over 20,000 inquiries about its Employment Support Scheme, which will open for applications next Monday, Lam said.
"The ESS webpage will be in operation... shortly for businesses to access relevant information,” the chief executive said.
“The trustees of the Mandatory Provident Fund Scheme will provide information, without administrative fees, for helping employers enroll in the ESS,” she explained.
Financial Secretary Paul Chan Mo-po told Citi's Pan-Asia Regional Investor Conference on Tuesday: “The impact of the pandemic on our real economy is in fact distressingly visible.
"Companies across a wide spectrum of sectors are suffering, with cash flow a severe concern; many are even facing pressure to shut down. Workers are losing their jobs. Those who are not are being forced to take non-paid leave or pay cuts,” Chan said.
“Our objective is to support enterprises, safeguard jobs, stimulate the economy and relieve some of the burdens weighing down on the people of Hong Kong,” the finance chief stressed.
Following the funding approval by the Legislative Council Finance Committee, the government will launch the HK$81 billion (US$10.38 billion) ESS, announced in April to provide financial support to employers to retain workers for six months in two tranches from June to November.
To qualify, an employer must not implement redundancies during the subsidy period. Employers must spend all the government wage subsidies on paying wages to their employees.
The scheme is expected to benefit over 260,000 employers and about 215,000 self-employed people.
More obvious increases in unemployment rates were observed in the construction sector; retail, accommodation and food services sector; information and communications sector; professional and business services sector (excluding cleaning and similar activities); education sector; and arts, entertainment and recreation sector.
Increases in the underemployment rate were mainly seen in the decoration, repair and maintenance for buildings sector; retail, accommodation and food services sector; transportation sector; and the education sector.
HONG KONG NEWS