Friday, November 21, 2008
HKG: 100,000 Jobs On The Line
I read over an article over the Hong Kong newspaper which I think it will be a good share to all. Below article is courtesy of The Standard, Benjamin Scent reporting.
Almost 100,000 more Hongkongers are in line to lose their jobs, with unemployment set to spike in the fourth quarter, economists predict.
The worrying news comes even though the government said yesterday the unemployment rate rose only slightly to a lower-than-expected 3.5% for the August-to-October period.
KPMG, one of the "Big Four" global accounting firms, added to the misery yesterday by laying off about 100 staff from its Hong Kong office, a source told The Standard.
Economists now estimate that up to 154,500 people, or 4.2% of the workforce, may be without a job by the end of the year, up from 131,800 at the end of October. As many as 220,700 people, or 6% of workers, from a wide range of sectors will be without paychecks by the time unemployment peaks some time next year, they predict.
Hong Kong has not seen unemployment levels that high since early 2005. "Things will get worse rather quickly in coming months," Bank of East Asia chief economist Paul Tang said.
Still, the situation is not predicted to be as gloomy as the 2003 SARS crisis when unemployment surged to 8.6%.
The government said unemployment rose to 3.5% for the August-to-October period, up from 3.4% in the July-to-September period. The figure was lower than the 3.6% median forecast of eight economists surveyed by Reuters.
Total employment actually increased by 3,600 during the period, while the numbe of unemployed people fell by 2,200.
"In the coming quarters we are going to have a much deeper recession," Hang Seng Bank senior economist Irina said.
Secretary of Labour and Welfare Matthew Cheung said yesterday the government expects 100 public works projects to come on steam in the next nine months, which will create 40,000 jobs for the construction sector.
"We will leave no stone unturned to promote employment on all fronts," Cheung said.
Financial Secretary John Tsang said that under the current circumstances it is hard for Hong Kong companies to avoid layoffs. He added he believes the unemployment rate will probably rise further in the near term.
DBS Bank (Hong Kong) senior investment strategist Daniel Chan said the trend in the labor market is "quite worrisome."
Chan added, "The unemployment rate may start to increase sharply later. If you look at the export orders, the outlook is very bad."
Chan said the poor performance of Hong Kong's banking sector will have a spillover effect on small & medium sized enterprises. The pain will also spread beyond the trade and finance sectors into tourism and consumption-related sectors, which will see high-end hotels and pricey restaurants take a hit, he explained.
"Only the fast-food industry can have a good performance," Chan said.
Citi economist Joe Lo said fears about job security will continue to keep consumers & home buyers cautious in spending and home purchase decisions.
Meanwhile, KPMG is laying off 100 staff, sources said.
Just last month, KPMG International deputy chairman John Harrison said the firm did not plan to change its hiring plan because of the financial tsunami.
So thinking of finding a job in Hong Kong? Not the right timing though. Sigh...