Hong Kong's unemployment rate rose to a record 8.7 percent in the three months ending July 31, as new graduates flooded an already tight labor market in the lingering aftermath of the SARS crisis, the government said yesterday.
Some 309,000 people were out of work during the three-month period, the Census and Statistics Department said. It said the unemployment rate "would remain high as a result of the continued entry of fresh graduates and school leavers into the labor market."
But officials predict a post-SARS recovery in tourism will improve Hong Kong's economy and the labor market.
"I am cautiously optimistic we are now coming out of the unemployment peak," said Financial Secretary Henry Tang. "The increase has moderated ... our economy is beginning to show some signs of recovery."
Unemployment reached a previous record of 8.6 percent for the three months ending June 30 as an outbreak of SARS-battered an already flagging economy, bankrupting many businesses and putting thousands out of work.
Officials said the increases in unemployment were mainly in trading, hotels and recreational sectors while construction, restaurants and business services recorded decreases in jobless numbers.
But a tourism rebound has fueled confidence that the economy and the labor market are poised to recover, said Ben Kwong, director of stock brokerage KGI Asia.
Officials said the rebound has been particularly noticeable in inbound tourism and related sectors such as airlines, the retail trade and business services.
Around 1.3 million people visited the city in July, a 78 percent rise from June, although still down 5 percent from the same period last year. Among last month's visitors, those from China was more than double that in May, while the hotel occupancy rate reached 60 percent in July compared with around 20 percent in May during the SARS crisis.
Having lost most of its manufacturing jobs to China, Hong Kong is looking to tourism to provide work for recent graduates and others.
In good times, the tourist trade employs 71,000 people and generates 6 percent of Hong Kong's economic growth. Another 295,000 people work in tourism-related sectors, such as restaurants.
But some Hong Kong people voiced pessimism about economic prospects.
"Many of my friends are still looking for jobs," said a 30-year-old finance manager Sharon Wong. "The recovery in our sector is slow and it'll take a long time before things will really look good."
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