Saturday, March 19, 2011

HK exports up as jobless rate slips

(The Standard, March 18, 2011)

Hong Kong's economy is on a roll, spurred by declining jobless rates and growing exports, but the crisis in Japan could act as a damper and disrupt the strong momentum, and economist warns.

The SAR's jobless rate dropped to 3.6 percent for the three months ending February, as compared to 3.8 percent in the quarter ending January. Beating a forecast of 3.7 percent, the rate was the lowest since the Lehman Brothers' collapse in September 2008.

But BWC Capital chief economist Daniel Chan Po-ming expects the SAR to see more challenges. New graduates will join the labor force in May when the minimum wage comes into force.

And the disaster in Japan may affect Hong Kong. "Since many high-end electronics products come from Japan, this sector will see the most impact," Chan said.

Total employment decreased by around 6,600 to 3.57 million in the three-month period ending February, with the labor force shrinking to 3.7 million.

The underemployment rate declined to 1.7 percent from 1.8 percent.

"In the near term, employers are positive about hiring staff ," said Secretary for Labor and Welfare Matthew Cheung Kin-chung, adding that the government will remain vigilant.

Meanwhile, Hong Kong's export volumes increased 20.7 percent, while imports rose 12.5percent.

Exports to the mainland grew 22.3 percent, followed by a 20.6 percent growth to the United States. Imports from the mainland increased 18 percent. Paul Tang Sai-on, chief economist at Bank of East Asia (0023), added that Hong Kong's re-exports will suffer as many Japanese products go to the mainland through Hong Kong.

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