55 -
For the manufacturing sector where the unemployment rate declined from 4.5% in the fourth quarter of 1995 to 3.5% in the same quarter last year, its relatively higher unemployment rate primarily reflects the on- going relocation of the more labour-intensive manufacturing processes outside Hong Kong, which has a dampening impact on local employment opportunities. In 1996, the unemployment situation in this sector was exacerbated by sluggish export performance. An additional factor was the increasing difficulty of the displaced manufacturing workers, especially those with lower educational attainment and less skills, to seek new employment in the face of more sophisticated job requirements in the increasingly service oriented economy. For this reason, the unemployed manufacturing workers had a longer median duration of unemployment than those in the service sectors.
As for the distributive and catering trades where the unemployment rate declined from 3.5% in the fourth quarter of 1995 to 2.9% in the same quarter last year, unemployment was concentrated more in the restaurants and hotels, and the retail trade sub-sectors, than in the import/export trade sub-sector. For the former two sub-sectors, employment conditions remained slack throughout the first half of 1996, mainly due to the setback in consumption demand and retail business, with some improvements seen in the second half only after consumption demand picked up more visibly.