Unemployment rate could rise by 50% in 2013

Find out what will fuel the nasty unemployment figures next year.

The over 50% rise in the unemployment rate from the current 3.2% will be fueled by negative factors such as a sluggish stock market and a weak IPO market, according to a survey of financial professionals by CPA Australia. The survey said that 72% of respondents saw a Hong Kong unemployment rate from 3% to 4.9%.

The official unemployment rate in Hong Kong from June to August was 3.2%. The government warned, however, that some local employers have suspended hiring staff and cautioned that the external environment will add more uncertainties to the city's negative economic outlook.

Ironically, about 52% of survey respondents expected the 2013 economic outlook to be satisfactory compared to the 36% recorded last year. Some 32% of respondents had a negative outlook for 2013 compared to 55% in 2012.

The CPA Australia survey involved 211 finance and accounting professionals from listed companies, multinationals, private enterprises, government and non-profit organizations. It was conducted this September.

"While we have not yet seen redundancies at the same rate as Europe or the US, we warn (Hong Kong) against complacency as there could likely be more lay-offs going forward due to a range of external and internal factors, including a flat IPO market," said Bernard Poon, divisional president of Greater China at CPA Australia.

A high ranking banking executive said the increase in the unemployment rate is due mainly to the sluggish local export sector. He noted that domestic consumption, real estate investment and public construction remain resilient and can bolster employment growth next year.

Recent lay-offs in the finance sector have been mostly concentrated on investment banking and brokerage but not in retail and private banking.