Hong Kong's Construction & Catering Sectors Remain Gloomy Despite Unemployment Dip to 3.8%

Hong Kong's Construction & Catering Sectors Remain Gloomy Despite Unemployment Dip

Hong Kong's job market presents a puzzling paradox: a recent dip in the overall unemployment rate has done little to lift the spirits of its crucial construction and catering industries. Despite the government reporting the first decline in joblessness since mid-2023, representatives from these sectors express deep-seated pessimism regarding their recovery prospects.

Unemployment Figures: A Mixed Signal

The latest figures, announced on a recent Thursday, revealed the unemployment rate eased to 3.8 percent over the past three months. This marks a marginal but notable 0.1 percent reduction from the three-year high of 3.9 percent recorded between July and September. For the construction sector specifically, unemployment saw a 0.2 percent improvement, dropping from 7.2 percent in the preceding quarter.

However, industry leaders caution against celebrating too soon. Chau Sze-kit, chairman of the Hong Kong Construction Industry Employees General Union, highlighted that despite the slight decrease, the unemployment rate for construction remains "generally high" and subject to fluctuations. He expressed concerns that this minor dip doesn't signify a true recovery.

Why the Persistent Pessimism?

The primary drivers behind this persistent gloom are two-fold. In construction, the outlook is clouded by a significant shortage of new private development projects. "If we compare the figures year on year, based on the number of construction permits issued, the number of projects this year has dropped significantly," Chau Sze-kit stated. This scarcity creates a considerable gap in available work, leading to worries that unemployment could escalate once more if the lack of private investment continues.

Meanwhile, the catering sector faces its own set of challenges, particularly unattractive wages for entry-level positions. This issue contributes to a general hesitancy about the industry's ability to rebound effectively, even as overall unemployment slightly improves. Both sectors, vital to Hong Kong's economic fabric, appear to be grappling with fundamental structural issues that a mere numerical improvement in unemployment has yet to resolve.