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Here's something for the Hongkongers to cheer about. The city's unemployment rate has plummeted through the 5-percent psychological mark to a 57-month low of 4.9 percent.

This is the first time the jobless rate has dropped below 5 percent since mid-2001 - a level long held by the financial officials as the psychological mark that can inspire a greater sense of optimism if it can sustain for another quarter.

"It is a marked improvement from the previous quarter. It sounds very good," Vice-President of Federation of Trade Unions (FTU) Leung Fu-wah said.

"The government has every reason to spread a sense of optimism within the society now that the unemployment rate has fallen below 5 percent. Financial Secretary Henry Tang once said this was a point very difficult to break through," City University of Hong Kong (CityU) political scientist James Sung added.

Sung said Hong Kong would have to hold the ground below 5 percent for at least another quarter or two to strengthen the sense of optimism in the community.

Unemployment and underemployment rates for the previous February-April quarter stood at 5.1 and 2.4 percent. However, underemployment rate for the March-May quarter rose to 2.6 percent though unemployment rate dropped to 4.9 percent.

Announcing the March-May figures yesterday, the government attributed the drop to increased decoration and maintenance activities in the construction industry, sanitary services and communications sectors.

A spokesman said total employment increased by 11,200 people, from 3,426,800 in the previous quarter to an all-time high of 3,438,000 in the March-May period. Over the same period, the workforce expanded by 5,600 persons to 3,613,000 workers.

Meanwhile, the number of unemployed people dropped by 5,600 to 175,000 for the March-May quarter. There are 9,400 more underemployed people, however, up from 85,600 to 95,000.

The spokesman said the overall labor demand continued to increase in the period along with the sustained economic recovery.

He cautioned that further improvement in the labor market situation would bear on whether the continued economic pick-up would create sufficient jobs for absorbing fresh graduates and school leavers in the coming months.

The labour market yet remained buoyant, the spokesman said. In May, the Labor Department recorded 40,801 private-sector vacancies, 14.3 percent higher than the same month last year.

Job fair for graduates

He said that the department would hold for the fresh university graduates a two-day job fair at the City Hall on June 28 and 29 where 50 employers would offer 3,200 jobs in the aviation and airport related services, information technology and telecommunications sectors.

FTU's Leung agreed with the government's observation, saying it had become easier for the university graduates to find a job this year.

"It's been easier for the fresh graduates to get employment this year. Those graduating in surveying or engineering are being approached or hired by the companies. Although there may not be sufficient construction projects here in Hong Kong, there are plenty across the border," Leung said.

Leung said the community had not seen the jobless rate fall below 5 percent for a long time, and was optimistic of further room for the figure to drop further "because we can do more in sectors like tourism, financial services, insurance, logistics, etc."

But he was pessimistic that the unskilled or low-skilled labor would continue to lose out in the boom.

More quarters needed

CityU's Sung said Hong Kong should stay guarded for at least another quarter or two for a firmer base to rejoice. "Economically, one quarter would be too short to judge on a trend. We need at least two or more consecutive quarters."

Sung, however, agreed that an unemployment rate lower than the 5-percent level was still a case for many to rejoice over.

"It would certainly be a relief for the government. The chief executive would have a case to cite about in his October policy address for employment has been his No 1 priority," Sung said.

Echoing the government's caution, he pointed out that the statistics for the quarters ending September or October would be subject to the stringent test of graduates and school leavers in summer.

Despite the improvement in the latest quarter, he said Hong Kong was wary about the problem.

"Unemployment remains serious in certain industries like construction. There're the uncertainties of avian flu and SARS for tourism. Competition from other ports in the Pearl River Delta has diverted business from Hong Kong's terminals," he said.

"The government has said for years creative industry will be the new economic growth point for Hong Kong. But we're still not very clear about it," he said, adding it would be necessary to locate a new growth point at the CE's Economic Summit.

(China Daily HK Edition June 20, 2006)