"Hong Kong unemployment rate rises to 32-month high of 5% | AboutHK.Com - more information about HK"

Hong Kong, the unemployment rate rose to a 32-month high, as the workforce by reducing the costs for companies, whether the city's deepening recession. The seasonally adjusted unemployment rate for the three months to February rose 5 percent, the government said today on the website, from 4.6 percent in late January. That was more than the 4.9 percent median estimate of 13 economists surveyed by Bloomberg News. Walt Disney Co., the second-largest U.S. media company, said today that the reduction of staff was in the city. The Government has committed to over 120,000 jobs through faster infrastructure expenses, subsidizing employers for new employees and the establishment of temporary government positions. "Although the government has pledged a massive program to create jobs, the timing and extent of the scheme is uncertain and much will depend on the response of the private sector," said Joanne Yim, chief economist at Hang Seng Bank Ltd in Hong Kong. "With more employers to shed jobs in the coming months, the unemployment rate in May climb as high as 7 percent this year." The unemployment rate has fallen for six straight months. "In the near future, the unemployment rate is expected to go even further, as labor demand remains weak, given the economic downturn, the government said in the statement. Hong Kong’s economy is heading for its first full-year contraction. Shrinking Economy The economy will probably shrink 2 percent to 3 percent in 2009, after 2.5 percent expansion last year, Financial Secretary John Tsang forecast in his budget speech on Feb. 25th The situation on the labor market will likely "continue to deteriorate," this year, he said. In a survey of 801 employers, 10 percent said they planned to take jobs in the second quarter, compared with 7 percent in the previous three months, the recruitment firm Manpower Inc. said last week. Walt Disney stopped and all creative design works on the expansion of the Hong Kong theme park, cutting 30 jobs in the city, the company today in a statement. Auditing firm Grant Thornton LLP is the salaries in its Hong Kong office and asking workers to take unpaid leave from next month, the Oriental Daily newspaper reported on 14 March. A deterioration in the labor market, coupled with falling prices of assets, has dampened consumer confidence. The gross domestic product fell 2.5 percent in the fourth quarter of 2008 over the previous year, while households fell 3.2 percent. The benchmark Hang Seng Index of shares fell over 38 percent last year. Comments Please login to post comments or replies.