Hong Kong's unemployment rate climbed to 3.4%, marking its highest level in over two years, with the construction and finance sectors particularly impacted, a situation experts anticipate will continue into late 2025.
According to preliminary figures released on Tuesday by the Census and Statistics Department, the jobless rate for the February-to-April period rose by 0.2 percentage points compared to the January-to-March timeframe.
This was the highest unemployment rate recorded since the period from November 2022 to January 2023, when it also reached 3.4%.
During the most recent three-month span, the rate rose across most major economic sectors, with significant increases seen in construction, accommodation services, food and beverage service activities, and the finance industry, South China Morning Post reports.
Secretary for Labour and Welfare Chris Sun Yuk-han observed that Hong Kong’s industries are undergoing a transitional phase, which may result in varied trends in unemployment rates across different sectors.
“However, the recent easing of trade tensions, the continued growth of the mainland [Chinese] economy, the government’s various measures to boost economic momentum and the continuous positive growth of the overall economy will provide support to the labour market,” Sun said.
He further noted that although some shops had recently closed, a substantial number of new businesses had opened, pushing the total number of registered companies in Hong Kong to a record 1.46 million by the end of 2024, a growth likely driven by evolving consumer demands and shifting consumption patterns.
“The recent successful organisation of a series of mega-events in Hong Kong, coupled with the concerted efforts of the government in tandem with different industries, including tourism, catering, hospitality and retail, has led to a significant increase in the number of inbound visitors, which will bring about more opportunities to the labour market,” he said.
Hong Kong received 16 million visitors in the first four months of the year, more than twice the number recorded during the same period in 2023.
Despite this surge in tourism, Gary Ng Cheuk-yan, senior economist at Natixis Corporate and Investment Bank, cautioned that weak private consumption and ongoing geopolitical uncertainties would continue to pose difficulties for the retail, catering, hospitality, and re-export trade sectors.
“Despite the recovering IPO activities, one mindful trend is whether the pressure in the financial industry will stay elevated, which can negatively affect other professional services and the economy,” Ng said.
Whereas Sid Sibal, managing director of Hong Kong-based hiring firm Aster Recruiting, predicted a slight rise in the unemployment rate through the end of 2025, especially in the finance and technology sectors, citing the prevailing economic sentiment as a contributing factor.
“In the last 12 months, most firms have laid off people whether they’re doing restructuring or mergers and acquisitions. Actually, when two firms merge, they then make a certain amount of workforce redundant,” he said.
“The large employers in technology who are hiring are not really hiring as much in Hong Kong. They are hiring in low-cost locations like the Philippines and Malaysia,” he added.