ENG-2009 — Page 101

The Economy | 53

Reflecting the broad-based improvements in private investment, gross domestic fixed capital formation resumed positive growth in the third quarter and picked up significantly further in the fourth quarter, trimming the annual decline to 2.2 per cent in real terms for 2009 as a whole (Chart 10).

Chart 10

20

Main Components of Domestic Demand (year-on-year rate of change in real terms)

Per cent

18

16

14

12

10

8

6

2

0

-2

-4

-6

Government

-8

-10

consumption expenditure

-12

-14

-16

-18

-20

Private consumption expenditure

Investment expenditure

in terms of gross domestic fixed capital formation

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

2005

2006

2007 │

2008 | 2009

Domestic demand had actually strengthened notably since the second quarter of 2009, along with the improvement in labour market conditions and better economic outlook.

The Labour Market

The labour market slackened markedly during the first half of 2009, as the economy was severely battered by the global financial crisis and the ensuing world recession. Consequential to the corporate sector cutting back on jobs in the midst of the most severe recession since 1998 at a time when more people were entering the labour force to search for jobs, the seasonally adjusted unemployment rate posted a sharp jump, reaching a high of 5.4 per cent in mid-2009. This was 1.3 percentage points above the level of 4.1 per cent at end-2008. Then as the economy hit bottom and progressively regained strength, the unemployment situation exhibited a steady improvement, falling back to 4.9 per cent at the year-end, below the 5 per cent mark for the first time since early 2009. Meanwhile, the underemployment rate moved within a narrow range of 2.1-2.5 per cent during 2009, ending the year at 2.3 per cent (Chart 11).

The labour force expanded by 0.8 per cent in 2009, while total employment fell by 1.1 per cent in tandem with the economic downturn. Although employment growth stayed in negative territory throughout the year, some economic sectors such as construction, tourism and financing recorded modest employment gains in the fourth quarter of 2009 over a year earlier. It was the trade-related sectors that bore the brunt of the job losses. Even though the growth in the labour force surpassed