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The city's unemployment picture is beginning to stabilize as its jobless rate rose a moderate 0.1 percentage point to 8.7 per cent for the three months to July.
A strong rebound in tourism-related sectors fuels hopes that the figure will soon reach the peak before coming down gradually.
"This moderation shows that our economy is beginning to show some signs of recovery," said Financial Secretary Henry Tang at a press briefing yesterday. "I hope we can realize this recovery and see improving figures soon."
The number of unemployed people increased by 9,000 to 309,000 as new graduates and school leavers entered the labour market.
But the underemployment rate dropped from 4.3 per cent to 4.2 per cent during the same period, the first decrease since the outbreak of SARS in April.
The financial secretary said he was "cautiously optimistic" that Hong Kong is now coming out of the unemployment peak.
"The jobless rate is very close to the peak as the economy has recovered from the SARS crisis and the tourism sector has given a strong momentum," said Vincent Kwan, senior economist of Hang Seng Bank.
Business for restaurants, retailers, bars, hotels and cinemas, which were hardest-hit by the SARS epidemic, has already recovered to the pre-SARS level or even better thanks to a significant increase in inbound tourists.
The Tourism Board said yesterday that some 1.3 million tourists visited Hong Kong in July, up almost 80 per cent from June.
Kwan expected the unemployment rate to edge up slightly to 8.8 per cent in the third quarter and fall to 8.5 per cent in the year-end.
"As to how much it will decrease, it all depends on the pace of Hong Kong's economic recovery," he said.
But Joe Lo, senior economist at Citibank, said any decline in the jobless rate "will be quite slow".
A government spokesman noted yesterday that the Labour Department recorded a substantial 60 per cent increase in the number of vacancies at its job centres in July as compared with June, the bulk of which came from the private sector.
Cathay Pacific Airways, the largest local airline, said earlier this month that it planned to start recruiting extra cabin crew in the coming months to serve the growing passengers.
"This reflects the growing recruitment needs of employers along with the revival in economic activities," the government spokesman said.
On short-term outlook, the spokesman said that the unemployment rate would remain high as a result of the continued entry of fresh graduates into the labour market.
But he believed that Hong Kong's economic situation is likely to improve thanks to the enhanced co-operation with the Pearl River Delta area, the Mainland/Hong Kong Closer Economic Partnership Arrangement and the gradual return of long-haul international travellers.
"This will have a positive effect on employment," he said.
(Hong Kong Edition, China Daily August 19, 2003)
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