Months of unrest starting to push up unemployment rate

While Hong Kong's overall unemployment rate had remained below 3 per cent since January 2018, that strength is waning. The rate rose to 3.1 per cent last month, more than the 3.0 per cent forecast in a Bloomberg survey of economists, data released on Monday showed.

Ginevra Tonelli, a sales assistant at clothing shop Excuse My French in Hong Kong's SoHo district, said her shop keeps watch on other stores on the street shutting their doors to decide if they need to do the same. "Giving workers unpaid leave and cutting hours is employers' first response to the downturn in business revenue," she said."As I expect protest activities to continue for longer, Hong Kong's tourism, retail and dining sectors are going to see further decline in businesses."

Instead, a need for training to compete likely means the participation rate - or those actively seeking employment - will fall as workers drop out or leave the city instead of looking for a new job. The city's labour force participation rate has remained above 60 per cent since 2011, says the Hong Kong Census & Statistics Department.

Kevin Lai, chief economist for Asia at Daiwa Capital Markets, said:"Small businesses can hang on for three to six months." He expects unemployment will creep up in January, potentially reaching 3.5 per cent in the near term.

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