ENG-2005 — Page 87

The Economy | 57

The Labour Market

After a year of distinct improvement in 2004, the labour market continued to fare strongly in 2005 under the influence of a sustained recovery in overall economic activity. Total employment trended upward over the course of the year, reaching a new high of 3.43 million in the fourth quarter, while the seasonally adjusted unemployment rate dropped to 5.3 per cent, the lowest level since July-September 2001. Taking the year as a whole, the unemployment rate fell markedly by 1.2 percentage points to 5.6 per cent. Unemployment declined not only on a broad front, but also in terms of intensity, as manifested by a reduction in its median duration from 97 days to 83 days and the number of people unemployed for six months or more which dropped from 83 100 to 61 100. The underemployment rate also moved lower to 2.5 per cent in the fourth quarter.

Chart 10

Unemployment and underemployment rates

10

9

00

8

7

6

LO

5

4

3

2

1

0

Per cent

Seasonally adjusted unemployment rate

Underemployment rate

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2001

2002

1

2003

2004 1

2005

Both the seasonally adjusted unemployment rate and the underemployment rate went down during 2005 amid the sustained economic recovery.

As in 2004, employment growth outstripped the labour supply growth in 2005 employment increased 2.3 per cent while labour supply grew 1 per cent. In absolute terms, the number of employed persons surged by 84 500, which was broadly similar to the average employment growth recorded during the economic upturn in the early 1990s. At year-end, total employment hit a new high of 3.43 million. When compared to the trough in mid-2003, there was a significant jump of 242 400, far outpacing the increase of 116 400 in the labour force over the same period. Employment gains, while occurring almost across the board in terms of economic sector and occupation category, were found mainly among people with upper secondary education or above.