Unemployment in Hong Kong declined to 2.9% in the second quarter of this year, the first time the figure has fallen under the 3% mark since 2019.

Hong Kong’s jobless rate edged down 0.1% between March and May, according to the Census and Statistics Department, which highlights an ongoing economic recovery and a return to full employment.

As it stands, the current rate of underemployment is 1.1%, a fall of 0.1%.

Hong Kong’s acting Labour and Welfare Secretary, Ho Kai-ming, stated that these statistics can be used to forecast an improvement in the job market and an ongoing rally within the economy. “The labour market should improve further in the coming months as the economic recovery gathers further strength,” he stated.

In addition, with 113,600 people in Hong Kong out of work, total employment rose by 15,400, which is an increase from around 3.78 million to 3.8 million between March and May, indicating a downward trend in unemployment, South China Morning Post reports.

However, according to economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at Chinese University, there is a challenge facing Hong Kong’s economic recovery, which is a rise in talented workers leaving the city: “This signals a lot of challenges for Hong Kong as it grapples with insufficient talent and lack of skilled workers. Employers will be forced to increase wages to attract people, pushing up their operating costs and, as a result, impeding economic growth,” he stated.

Whereas Gary Ng Cheuk-yan, senior economist at Natixis Corporate and Investment Bank, said the low jobless rate signalled some hidden issues: “The economic recovery is not so robust. The retail sector has rebounded, but exports have continued to face downward pressure,” he said.

“It shows that the labour force participation rate is not satisfactory, leading to a low jobless rate. Amid the outflow of people, the city’s employers will continue to have problems hiring people,” he added.