Report on
Manpower Projection to 2007
Government of the Hong Kong Special Administrative Region June 2003
Report on
Manpower Projection to 2007
Economic Analysis Division, Financial Services and the Treasury Bureau in collaboration with
Education and Manpower Bureau, Census and Statistics Department, and
Labour Department
Government of the Hong Kong Special Administrative Region June 2003
Manpower projection to 2007
Content Paragraphs
Summary (pages i – v)
Introduction 1 - 3
The macroeconomic scenario 4 - 5
Approach for the assessment 6 - 8
Assessment results
(A) Manpower requirement projections
(i) Projection of manpower requirement by economic sector
9 - 11 (ii) Projection of manpower requirement by occupation
category within economic sector
12 - 15 (iii) Projection of manpower requirement by educational
attainment within occupation category
16 - 20 (iv) Projection of manpower requirement in strategic
economic sector/domain
21 - 37
(B) Manpower supply projections
(i) Population projection 38 - 39
(ii) Labour force projection 40 - 41
(iii) Projection of manpower supply by educational attainment
42 - 43
(C) Projected manpower resource balance 44 - 48
(D) Comparison between the 2000-round and 2003-round projections
(i) Manpower requirement 49 - 52
(ii) Manpower supply 53 - 54
(iii) Manpower resource balance 55 - 56
(E) Surveys and consultations
(i) Household survey on employment concerns and training needs
57 - 65 (ii) Establishment survey on manpower training and job
skill requirements
66 - 76 (iii) Broad-level consultation with business, labour and
related organisations
77 - 82
Concluding remarks 83 - 90
Manpower Projection to 2007
Summary
The general trend of globalisation in trade and investment, the rapid advances in production, service and communications technologies, as well as China’s robust economic growth and progressive liberalisation together with accession to the World Trade Organisation (WTO), have been prompting profound changes in the global and regional economic scene. In an increasingly competitive international marketplace, it is crucial for Hong Kong to foster a well-educated, well-trained, capable and versatile workforce in order to stay aloft in the pursuit of business opportunities and hence to sustain overall economic growth. It is against this background that the Government has carried out another round of projection of manpower requirement and supply to 2007, further to its earlier projection up to 2005.
2. There are two main tracks of work in this projection exercise. These are (i) making quantitative projections of manpower requirement and supply for the medium-term period; and (ii) soliciting qualitative views of employers and employees on business outlook, employment prospect, career aspirations and training needs through surveys and consultations.
3. Projection of manpower requirement, covering all employed Hong Kong residents regardless of their place of work and excluding foreign domestic helpers, is done in a manner that is free from constraint from the manpower supply.
This is intended to reflect fully the extent of potential job opportunities emerging.
On this basis, total manpower requirement is projected to grow from 3.03 million in 2001 to 3.22 million in 2007, representing an average annual growth rate of 1.0% or an addition of 193 300 jobs over the period.
4. Analysed by economic sector, the financing, insurance, real estate and business services sector is projected to have the fastest increase in manpower requirement, at an average annual rate of 3.0% over the period 2001-07. The transport, storage and communications and the community, social and personal services sectors are also projected to have relatively faster increase in manpower requirement, at average annual rates of 2.4% and 1.7% respectively over the same period. Yet the wholesale, retail and import/export trades, restaurants and hotels
sector and the construction sector are projected for rather slower rise in manpower requirement, both at an average annual rate of around 0.5% over the period. The local manufacturing sector is projected for continued shrinkage in manpower requirement, with an average annual rate of decline of 5.5% over the period.
Amongst the sub-sectors, particularly notable increases in manpower requirement are envisaged for insurance, postal/courier services, sanitary services, non-Chinese restaurants, recreational services and business services.
5. In line with continuous orientation towards a service-specialised and knowledge-based economy, manpower requirement is likely to favour the higher-skill, better-educated and more experienced workers. Hence on occupation category, total manpower requirement for managers and administrators, professionals and associate professionals taken together is projected to grow at an average annual rate of 3.3% over 2001-07, as against a decline of 0.3% projected for workers below these levels.
6. Specifically, for associate professionals and professionals, manpower requirement is projected to have the fastest rise, at average annual rates of 4.0% and 3.4% respectively over 2001-07, and then for managers and administrators, at a corresponding rate of 1.7%. For service workers and shop sales workers and for workers in elementary occupations, manpower requirement is projected for an average annual increase of 1.2% for both categories over the same period. Yet for clerks, manpower requirement is projected for an average annual decline of 2.1%
over 2001-07, amidst continuous automation and relocation of office processes.
For plant and machine operators and assemblers and for craft and related workers, manpower requirement is likewise projected to decrease, on annual average by 0.7%
and 0.8% respectively over the period.
7. Concurrent with a shift in manpower requirement towards the upper segment of the occupation hierarchy, a shift towards the higher end of educational attainment is also foreseen. Manpower requirement for persons at post-secondary level and at first degree level and above are projected for strong growth over 2001-07, on annual average by 5.4% and 6.3% respectively. These taken together more than offset the projected decline in manpower requirement for persons at lower secondary level and below and at upper secondary level, on annual average by 1.6%
and 1.0% respectively over the same period.
8. Analysing the educational attainment requirement within different occupation categories, a virtually across-the-board upgrading is expected. Of particular note is the projected upward shift in demand for managers and
administrators more towards persons at first degree level and above, for associate professionals more towards persons at sub-degree level and above, for clerks more towards persons at post-secondary level, as well as for craft and related workers, plant and machine operators and assemblers, and workers in elementary occupations all more towards persons at upper secondary level.
9. The five strategic economic sectors/domains are expected to provide much impetus to the growth in overall manpower requirement over the medium-term period. Specifically, manpower requirements in information technology, tourism, professional services and financial services are all projected to grow at a significantly faster pace than overall manpower requirement in the economy to 2007, at average annual rates of 6.1%, 5.9%, 3.7% and 2.7% respectively as compared to that of 1.0% overall. As to manpower requirement in trading and logistics, it is projected to grow nearly on par with the overall pace, at an average annual rate of 0.9% over the same period. Also, this sector will continue to provide considerable job opportunities, projected at slightly more than one-quarter of the total employment in 2007. In general, it shows that for all these strategic sectors/domains, the trend of continuous shift towards workers with better education and higher skills is likely to continue.
10. The total local manpower supply, i.e. excluding foreign domestic helpers and imported workers, is projected to expand from 3.20 million in 2001 to 3.35 million in 2007. This represents an average annual growth rate of 0.8% over the period. The increase is attributable entirely to a projected rise in the population of working age, at an average annual rate of 1.5%, which more than offsets a projected decline in the overall labour force participation rate.
11. Differentiating by educational attainment, manpower supply at lower secondary level is projected to decline by an annual average of 1.5% over 2001-07, as young people are less likely to stop at this education level upon the availability of better education opportunities at a higher level. Manpower supply at upper secondary level is projected to increase only mildly, by an annual average of 0.7%
over the same period. Manpower supply at post-secondary level and at first degree level and above are nevertheless projected for distinctly faster growth, on annual average by 3.1% and 4.6% respectively over the period.
12. Matching the projections of manpower requirement and manpower supply by broad educational attainment groups, the projected manpower resource balance in 2007 can be depicted.
Projected manpower resource balance by broad educational attainment in 2007
(a) (b) (c) = (a) - (b)
(d) = (c)/(a) x 100%
Broad educational attainment
Projected manpower
supply*
Projected manpower requirement**
Projected manpower
resource balance
As % of the respective
projected manpower
supply
Lower secondary and below 1 236 200 1 102 700 +133 500 +10.8
Upper secondary@ 989 100 891 000 +98 000 +9.9
Post-secondary # 501 200 566 400 -65 200 -13.0
First degree and above~ 626 000 662 500 -36 500 -5.8
Notes : (@) Including the upper secondary and craft levels.
(#) Including the matriculation, technician and sub-degree levels.
(~) Including the first degree and postgraduate levels.
(*) Excluding foreign domestic helpers and imported workers.
(**) Including all employed Hong Kong residents regardless of their place of work, and excluding foreign domestic helpers.
(+) Surplus in manpower supply against requirement.
(-) Shortfall in manpower supply against requirement.
13. This shows that the projected surplus in manpower is most significant at the lower secondary level and below, at 133 500 or 10.8% of the projected manpower supply at that level in 2007. The projected surplus in manpower at the upper secondary level is also considerable, at 98 000 or 9.9%. Both reflect that the evolving job requirements are less in favour of persons with up to such educational attainment. On the other hand, there is a distinct projected shortfall in manpower at the post-secondary level, at 65 200 or 13.0% of the projected manpower supply at that level in 2007, as demand is being upgraded while supply is yet to catch up adequately. There is also much projected shortfall in manpower at the degree level, at 36 500 or 5.8%, as demand at such level should continue to be strong.
14. From the surveys and consultations, the feedback is in broad agreement with the quantitative projection results, pointing to an upward shift in manpower requirement more towards workers with better education and higher skills. In addition to on-going orientation towards a knowledge-based economy, expanding business opportunities in the mainland of China (the Mainland) upon China’s accession to WTO and ever closer economic links between Hong Kong and the Mainland will also lift the demand for workers at the upper segment of the occupation hierarchy.
15. From the perspective of the local workforce, those with higher educational attainment and at the upper segment of the occupation hierarchy are generally more optimistic about their job prospect, whereas those with lesser education and skills are usually found to be less able to cope with changes in manpower demand. Yet at all levels, most of them envisage a tighter job requirement and greater work intensity in the course of time. From the perspective of the business community, the establishments surveyed generally see the need to equip their staff well in order to compete. This poses an imperative task to the Government and the education and training institutions in regard to manpower planning and provision, in order to strive for an optimal and efficient use of the available human resources and to underpin economic growth.
16. Overall, the present assessment points to a gradually improved aggregate manpower resource balance in the medium-term period to 2007, with the economy being expected to return to a more stable growth path after the current setback. But there is likely to be protraction of a marked degree of imbalance at different broad levels of educational attainment. Recognising the economic uncertainties that may emerge from time to time on both the external and domestic fronts, as well as the technical margin of uncertainty with a projection exercise of this nature, it is advisable to have periodic review and update of the manpower projection, in order to keep track of the evolving economic situation and developments in the labour market.
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Manpower Projection to 2007
Introduction
The trend of globalisation as facilitated by the advance in information technology (IT), coupled with China’s accession to the World Trade Organisation (WTO), has led to a new order in international division of labour. In this increasingly competitive environment, it is crucial for Hong Kong to foster a well-educated, well-trained, capable and versatile workforce in order to succeed in the pursuit of business opportunities and to benefit from the robust economic growth in the mainland of China (the Mainland). It is against this background that the Government has carried out a new round of projection of manpower requirement and supply to 2007.
2. As in the last round conducted in 2000(1), the projection is the combined result of a quantitative analysis of data and a qualitative analysis of feedback from surveys and consultations. In addition to this main report, five supplementary reports have been compiled to provide more focused analysis of the projected manpower requirement in the five economic sectors/domains which are of strategic importance to the Hong Kong economy. There are also a number of detailed analytical and survey reports underpinning the study results as given in this main report. The titles of these supplementary reports and detailed reports are listed in Annex 1.
3. Apart from this introduction, the main report comprises four main parts. Part I provides a broad outline of the macroeconomic scene that is likely to influence the development of the Hong Kong economy in the coming years, with ensuing implications for the labour market. Part II describes in broad terms the approach and methodologies adopted for projecting the manpower requirement, manpower supply and manpower resource balance to 2007. Part III presents the key projection results thus derived, as well as the major findings from the surveys and consultations. Part IV gives some concluding remarks.
(1) “Report on Manpower Projection to 2005”, Economic Analysis Division of the then Financial Services Bureau in collaboration with the Education and Manpower Bureau, Census and Statistics Department, and Labour Department, November 2000.
The macroeconomic scenario
4. With its high degree of external orientation, the Hong Kong economy has been hit profoundly by the Asian financial crisis in 1998 and the synchronised global economic downturn in 2001. But still, the economy has derived its growth impetus mainly from the external source over the past few years, as the completion of the Airport Core Programme project in 1997-98 and the bursting of the property market bubble after 1997 resulted in a sharp decline in domestic spending within the economy. Against this background, manpower requirement in the local economy was generally slack during 1998-2002, except in 2000 when the economy staged a robust upturn.
¾ Slack labour market conditions : Amidst a profound shock externally, the unemployment rate soared from below 3% to nearly 6% over the course of 1998. Even with a strong pick-up in overall economic activity in 2000, the unemployment rate was still higher than the normal level. This has raised concern about structural change in the labour market, and the likelihood of a weaker link between the external and the domestic economic dimensions. The abrupt change in demand, coupled with the pressure in maintaining cost competitiveness, has prompted the corporate sector to take a more critical look at its manpower resource situation, resulting in waves of corporate downsizing and restructuring.
Along with the reduction in staffing, employment has shifted more towards workers with higher skill and better educational attainment, leaving those at the lower level being harder hit. For the economy as a whole, this shift in employment composition helps reduce cost and render higher average labour productivity, and facilitates the development of more sophisticated and higher value-added activities.
However, workers at the lower level, being generally less adaptable to changes in manpower demand, may thus not be able to benefit as much from further economic growth.
¾ China’s accession to the World Trade Organisation : China is now in the second year of its accession to WTO. Over the past year or so, the Mainland saw robust export growth and accelerated capital inflow.
Foreign capital will spur technological upgrading in both production
capacity. This, together with continued revamping of enterprises and liberalisation of markets, should greatly enhance the growth potential of the Mainland economy, although there will continue to be challenges in adaptation and adjustment.
Sustained economic growth and market opening in the Mainland will bring about ample business opportunities for Hong Kong companies.
In the past two decades or so, Hong Kong has benefited enormously from the Mainland’s open door policy through exercising its middleman role in trading and foreign direct investment, and through relocation of the more labour-intensive production process across the boundary. As a highly service-oriented economy, Hong Kong can be expected to benefit even more from the Mainland’s progressive opening up of its service sectors following WTO accession, including sectors like banking, securities, distribution, tourism and telecommunications.
The Closer Economic Partnership Arrangement (CEPA) with the Mainland is expected to present broader and deeper business opportunities for Hong Kong companies in the vast Mainland market.
In turn, this will provide ample employment opportunities for the Hong Kong workforce. Upon closer co-operation with the Mainland in the economic sphere, Hong Kong will thrive as a leading hub and gateway for the huge hinterland.
¾ A new global and regional economic order : Over the past decade, the global economy was characterised by expansion in the US and East Asian economies, along with shrinkage or slackening in the Japanese and European economies. The US economy, after over ten years of uninterrupted growth, now contributes around one-third of the world GDP. Yet the ascendancy of the East Asian economies, in particular the Mainland economy, is also respectable. China’s contribution to the world GDP almost doubled over a span of just ten years, with a share of 3.9% in 2002. The Mainland is expected to play a more prominent role in both the global and the regional economies in the years ahead, given the sheer size and potential of its economy and it now being a WTO member.
In fact, China had been the key engine of economic growth in the region over the past few years, as reflected by the robust intra-regional trade involving the Mainland. Apart from being a major manufacturer for the world, the Mainland is also a growing
consumer of world products, thereby providing an increasingly useful buffer against slow-down in demand in other parts of the world.
The Mainland is thus playing such a dual role in the overall globalisation process, which has become irreversible with the advance in technology and move towards greater liberalisation. The recent concern with Severe Acute Respiratory Syndrome (SARS) may only be a brief aberration in this main mega trend.
5. The emergence of an increasingly competitive international business environment will however aggravate the current mismatch between labour demand and supply in Hong Kong. In order to make optimal use of the human resources, it is of utmost importance to identify at an early stage the extent of imbalance between projected manpower requirement and supply at the various education levels, and henceforth to devise appropriate policy measures to redress.
Approach for the assessment
6. There are two main tracks of work in the present assessment. These are (i) making quantitative projections of manpower requirement and supply for the period up to 2007; and (ii) soliciting qualitative views of employers and employees on business outlook, employment prospect, career aspiration and training needs through surveys and consultations. The methodologies underlying these two major tracks of work are described below.
7. On quantitative projection, a bottom-up approach involving detailed data analysis and statistical model fitting is adopted for projecting manpower requirement by economic sector in 2007. This is further broken down into manpower requirements by occupation category and educational attainment, for matching against the projected manpower supply by educational attainment. In this quantitative analysis, account has been taken of the detailed labour force and employment data collated from the 2001 Population Census(2), the General
(2) The 2001 Population Census provides a comprehensive data set for analysis of and hence formulation of projection for manpower requirement by occupation category and educational attainment within economic sector. It also provides the necessary data input for projecting manpower supply. It is for these reasons that 2001 has been chosen as the base year for the present round of manpower projection. That said, reference has also been made to the actual data in 2002, as well as to the findings of the two qualitative surveys on households and on establishments and of the consultations conducted in around mid-2002, in working up the projection results.
Household Survey, and the Survey of Employment and Vacancies on Establishments. Reference has also been made to the qualitative views obtained from surveys and consultations.
Manpower requirement
¾ Projection of manpower requirement by economic sector : Projection is made of the total manpower requirement and its sectoral distribution up to 2007, covering all employed Hong Kong residents regardless of their place of work and excluding foreign domestic helpers, in a way which is unconstrained by the overall labour supply.
This is intended to reflect fully the extent of potential job opportunities emerging. For this purpose, statistical forecasting models have been formulated and run for 40 major economic sectors, based on their respective employment data series from 1986 to 2001.
The projected growth rates thereby generated are then examined carefully and refined, taking into account the views of industry leaders, trade association representatives, academic experts, and relevant Government bureaux and departments as obtained during the consultations. Applying these projected growth rates to the base-year employment figures for 2001 gives the projection of manpower requirement by economic sector for 2007.
¾ Projection of manpower requirement by occupation category within economic sector : This involves a more detailed breakdown of the projection for each of the economic sectors into nine major occupation categories, for which the respective growth rates up to 2007 are projected primarily on the basis of their growth trends over the period 1996-2001. Relevant information gathered from the surveys and consultations is also taken into account. Applying these projected growth rates to the base-year 2001 figures yields the projection of manpower requirement by occupation category within economic sector for 2007.
¾ Projection of manpower requirement by educational attainment within occupation category : Having regard to the past profile of educational attainment of employed persons and relevant feedback from the surveys and consultations, the projection of manpower requirement by occupation category is further split into eight major levels of educational attainment for 2007.
Manpower supply
¾ Population projection : This is the necessary starting point for projection of manpower supply. Projection of the total population and its age-sex composition is made on the basis of the fertility, mortality and migration trends envisaged for the future period.
¾ Labour force projection : For projecting the labour force, a set of projected age-sex specific labour force participation rates (LFPRs) is required. This is obtained mainly from statistical extrapolation of past trends. Applying these projected LFPRs to the population projection, and then summing up the results across the various age-sex groups, gives the projection of labour supply for 2007. As the focus is on the underlying manpower resource balance in the local economy, foreign domestic helpers and imported workers are excluded.
¾ Projection of manpower supply by educational attainment : Projection of local manpower supply by eight major levels of educational attainment for 2007 is made on the basis of the programmes planned for different levels of education and vocational training over the period. The effects of ageing and mortality in the existing manpower stock, as well as inflow/outflow of the respective manpower, have also been taken into account in working out the projection.
Manpower resource balance
¾ Manpower resource balance by educational attainment : Bringing together the projection of manpower requirement by educational attainment and the corresponding projection of local manpower supply gives the projection of manpower resource balance by educational attainment for 2007.
8. On qualitative analysis, study is made of data and information obtained from the two comprehensive and scientifically designed surveys of households and business establishments conducted by the Census and Statistics Department (C&SD), and from the broad-level consultation with selected business,
¾ Household survey on employment concerns and training needs : This survey was commissioned by C&SD during the third quarter of 2002. At a response rate of 72%, a total of 8 000 households were successfully enumerated for their views on a wide range of issues of concern to persons in the labour force, including challenges/problems encountered in the current jobs, perceived prospects of the currently engaged economic sectors and occupation categories, impact brought about by corporate restructuring since 2001, personal career aspirations, experience in and aspirations for working in the Mainland, and experience in and plan for attending job-related training/retraining courses. The questionnaire used for this survey had incorporated comments from local academic experts and trade unions.
¾ Establishment survey on manpower training and job skill requirements : This survey was conducted by C&SD also during the third quarter of 2002 to collect employers’ views on manpower training and job skill requirements. Specifically, employers were invited to give views on their future manpower requirements, aspirations and preparations in relation to Hong Kong’s economic restructuring and China’s accession to WTO, manpower training and job skill requirements, and evaluation of employees’ general performance. A total of 4 200 establishments were successfully enumerated, constituting a response rate of 90%. The questionnaire was prepared after consulting local academic experts and trade unions/business associations.
¾ Broad-level consultation with business, labour and related organisations : This consultation was undertaken by LD in June and July 2002. It was aimed at gauging views from employers’
associations, employees’ groups and related organisations on the impact that Hong Kong’s economic restructuring is likely to have on the labour market. Specifically, respondents were asked to give their views, via self-administered questionnaires, on opportunities and challenges for the local labour market as a result of restructuring of the local economy, prospects in the various sectors and for the economy as a whole, and possible measures to upgrade the quality of local workers. A total of 48 replies were received, giving a response rate of 49%.
Assessment results
(A) Manpower requirement projections
(i) Projection of manpower requirement by economic sector
9. Total manpower requirement, covering employed Hong Kong residents and excluding foreign domestic helpers, is projected to continue to grow over the medium term, from 3.03 million in 2001(3) to 3.22 million in 2007, representing an average annual growth rate of 1.0% (Annex 2). Although this is faster than the actually attained average annual growth in total employment, excluding foreign domestic helpers, of 0.7% in 1996-2001, it is slower than the corresponding growth of around 1.2% in 1990-96(4). Total employment, after contracting in 1998 and 1999 upon the impact of the Asian financial crisis, rebounded in 2000 and 2001, yet shrank again in 2002.
(3) This pertains to the Composite Employment Estimate, which is compiled annually by C&SD on the basic of the results from the Quarterly Survey of Employment and Vacancies, the General Household Survey, and other supplementary data sources. As each constituent set of employment data is subject to some limitations in revealing the level and distribution of territory-wide employment by economic sector, the Composite Employment Estimate, having been reconciled with due regard to the relative strengths and weaknesses of these data sources, provides an overall better set of employment figures for application in general and for analysing the sectoral breakdown of employment in particular.
(4) The figure for 1990-96 is compiled under the old-definition population series, before the current “resident population” approach is adopted for compiling the population estimates.
Table 1 : Projected manpower requirement by economic sector
Economic sector
Actual employment
in 2001
Projected manpower requirement
in 2007 Change in 2007 over 2001
Number % share Number % share Number % change
Average annual %
change Primary
Agriculture and fishing 11 000 0.4 8 400 0.3 -2 600 -23.4 -4.3
Secondary
Mining and quarrying 200 * 100 * -100 -60.2 -14.2
Manufacturing 212 500 7.0 151 200 4.7 -61 300 -28.9 -5.5
Electricity, gas and water 13 600 0.4 12 600 0.4 -1 000 -7.2 -1.2
Construction 298 500 9.9 307 600 9.5 9 100 3.0 0.5
Tertiary
Wholesale, retail and import/export trades, restaurants and hotels
1 049 600 34.6 1 084 300 33.6 34 600 3.3 0.5
Transport, storage and communications
362 400 12.0 417 100 12.9 54 700 15.1 2.4
Financing, insurance, real estate and business services
489 900 16.2 585 500 18.2 95 500 19.5 3.0
Community, social and personal services
591 600 19.5 655 900 20.4 64 300 10.9 1.7
All economic sectors# 3 029 400 100.0 3 222 700 100.0 193 300 6.4 1.0
Notes : (*) Less than 0.05%.
(#) Excluding foreign domestic helpers.
Figures may not add up exactly to the total due to rounding.
10. A breakdown by economic sector indicates that the tertiary sector, or the service sectors as a whole, will constitute the major source of growth in manpower requirement over the medium term, with its share in the overall total projected to rise further from 82% in 2001 to 85% in 2007. On the other hand, the share of the secondary sector in overall manpower requirement is projected to continue to decline, from 17% in 2001 to 15% in 2007. This is mainly attributable to a further contraction in the share for the manufacturing sector, from 7% to 5%. The corresponding share for the construction sector is projected to remain broadly stable over the period, at slightly below 10%. As to the primary sector, its share in overall manpower requirement is projected to stay at less than 1% up to 2007.
Diagram 1 : Manpower requirement by economic sector, 2001 and 2007
Agriculture and fishing
Mining and quarrying
Manufacturing Electricity, gas and
water
Construction Wholesale, retail and
import/
export
Transport, storage
and communications
Financing, insurance, real estate
and
Community, social and
personal services
0 200 400 600 800 1000 1200 '000
2001 (actual employment)
2007 (projected manpower requirement)
11
trades, restaurants and hotels
business services 8
213 151
0.2 0.1 14 13
299 308 1050
1084
362 417 490
585 592 656
Diagram 2 : Actual employment by economic sector, 2001
Projected manpower requirement by economic sector, 2007
Wholesale, retail and import/export trades, restaurants and hotels
35%
Transport, storage and communications
12%
Financing, insurance, real estate and business
services
16% Community, social and
personal services 20%
Construction 10%
Electricity, gas and water
0.4%
Manufacturing 7%
Mining and quarrying
<0.1%
Agriculture and fishing
0.4%
Secondary sector (17%)
Primary sector (0.4%) Tertiary
sector (82%)
Wholesale, retail and import/export trades, restaurants and hotels
34%
Transport, storage and communications
13%
Financing, insurance, real estate and business
services
18% Community, social and
personal services 20%
Construction 10%
Electricity, gas and water
0.4%
Manufacturing 5%
Mining and quarrying
<0.1%
Agriculture and fishing
0.3%
Secondary sector (15%)
Primary sector (0.3%) Tertiary
sector (85%)
11. The individual industries, services and trades that make up these broader economic sectors are expected to show different growth profiles, as discussed below :
¾ Within the service sectors, the wholesale, retail and import/export trades, restaurants and hotels sector is expected to remain the largest source of employment over the medium term, with the manpower requirement projected at 1 084 300 in 2007. This is followed by the community, social and personal services sector (655 900); the financing, insurance, real estate and business services sector (585 500); and the transport, storage and communications sector (417 100).
¾ In the construction sector, manpower requirement is projected at 307 600 in 2007. As to the other sectors, manpower requirement is projected at 151 200 in manufacturing; 12 600 in electricity, gas and water; 8 400 in agriculture and fishing; and 100 in mining and quarrying.
¾ Ranked in terms of growth rate, the financing, insurance, real estate and business services sector is projected to have the fastest growth in manpower requirement, at an average annual rate of 3.0% over the period 2001-07. This is largely underpinned by :
z The high growth in the local insurance market, as the penetration rate of life insurance is far from saturated so that the industry should have considerable room for expansion.
Although the double-digit annual growth seen in the recent past may not continue, the future growth in the industry would still be robust;
z The increase in manpower for real estate, to provide quality building management services, and to cope with the additional demand arising from the large number of new private residential flats; and
z The expansion in business services, due to the popularity of contracting out IT services and the positive effect brought about by China's accession to WTO.
¾ Transport, storage and communications will be another service sector with good growth potential. Its manpower requirement is projected to increase at an average annual rate of 2.4% over 2001-07, largely attributable to :
z The further development of Hong Kong as a logistics hub in the region, especially for air freight transport;
z New business opportunities brought about by continued technological advancement in the telecommunications and internet services sector; and
z Greater demand for courier or delivery services.
¾ As to the community, social and personal services sector, manpower requirement is projected to grow at an average annual rate of 1.7%
over 2001-07. Despite the drop in employment in public administration, more notable growth in manpower requirement is expected in the following areas :
z The growth in population and the ageing phenomenon will increase the manpower requirement in medical and health services as well as in other community and social services, especially in homes for the aged. Also, the severe impact of SARS demonstrates the importance of maintaining sufficient manpower for both prevention and cure in the medical and health field;
z The Government's target of providing post-secondary education to 60% of senior school graduates and the development of a knowledge-based economy will increase the manpower demand in education services;
z The opening of Hong Kong Disneyland and the surge in number of visitors from the Mainland will require more manpower for recreational services;
z Manpower requirement for sanitary services will be strong, in line with the trend of contracting out such services, and increased focus on sanitary conditions in the aftermath of SARS; and
z The sustained increase in demand in respect of barber and beauty shops as well as other personal services will add to the manpower requirement in this sector.
¾ Yet the wholesale, retail and import/export trades, restaurants and hotels sector is projected to have a relatively slower growth in manpower requirement, at an average annual rate of 0.5% over 2001-07. The growth is expected to come mainly from the following sources :
z Despite a more or less stagnant manpower requirement in the import/export trade over the past few years, the initiatives being taken to promote trade between Hong Kong and the Mainland, including CEPA, should foster growth in this sector and hence in its manpower requirement; and
z The retail trade, restaurants, and hotels and boarding houses are expected to benefit from the robust growth in incoming visitors, especially those from the Mainland.
¾ Similarly, manpower requirement in the construction sector is projected to grow only slowly, at an average annual rate of 0.5% over 2001-07, with a relative shift in composition of manpower within the sector as follows :
z The large-scale infrastructure projects to be developed will support the demand for on-site construction workers, but these civil engineering projects are less labour intensive than the housing projects. Meanwhile, the subdued property market and heavy scale-back in the Public Housing Programme will continue to restrain the demand for site workers. Overall, the demand for site workers is expected to fall over 2001-07;
and
z Yet this is expected to be more than offset by the growth envisaged for non-site workers in the sector, including in particular those providing repair and maintenance services on existing buildings. More recently, the SARS impact has aroused greater public concern about the importance of proper building maintenance, so raising manpower requirement in this area.
¾ On the other hand, manpower requirement in the local manufacturing sector is projected to continue to shrink, at an average annual rate of 5.5% over 2001-07. This is largely attributable to the following factors :
z The full elimination of quota restrictions on WTO members, if to come about by 2005, will induce further relocation of production facilities in the textiles and wearing apparel industries to the Mainland;
z Continuously improving investment environment in the Mainland, including an abundant supply of skilled production workers and technologists as well as enhanced infrastructural facilities; and
z Keen competition from other low cost production bases in the region.
¾ As to agriculture and fishing, mining and quarrying, and electricity, gas and water, these are sectors with relatively small size of employment, for which decreases in manpower requirement are projected in 2007 over 2001.
¾ Taking all the economic sectors together, total manpower requirement is projected to increase by 193 300 between 2001 and 2007, with business services, non-Chinese restaurants and non-site construction taken together accounting for around half of the projected overall employment gain. Also worth noting is the high growth rate of manpower requirement projected for insurance, postal/courier services, sanitary services, non-Chinese restaurants, recreational services and business services (Annex 3).
(ii) Projection of manpower requirement by occupation category within economic sector
12. Concurrent with the on-going shift in economic structure more towards knowledge-based activities, there has been a leap in demand for higher-skill, better-educated and more experienced workers in recent years. This trend is expected to continue over the medium term. As an indication, total manpower requirement for managers and administrators, professionals and associate professionals taken together is projected to grow at an average annual rate of 3.3% over 2001-07, distinctly faster than that of 1.0% projected for overall manpower requirement.
13. Yet at the same time, manpower requirement for lower-skill workers(5) is projected to shrink moderately, at an average annual rate of 0.3% over 2001-07.
This is mainly due to a substantial drop in the demand projected for clerks, amidst continuous automation of office processes and relocation of supporting departments to lower cost areas outside Hong Kong. Also contributed in part is a projected decline in the demand for craft and related workers and for plant and machine operators and assemblers, along with further contraction in the local manufacturing sector.
(5) In this assessment, lower-skill workers are defined to include clerks, service workers and shop sales workers, craft and related workers, plant and machine operators and assemblers, and workers in elementary occupations.
Table 2 : Projected manpower requirement by occupation category
Occupation category
Actual employment in 2001
Projected manpower requirement
in 2007 Change in 2007 over 2001
Number % share Number % share Number % change
Average annual %
change Managers and administrators 283 900 9.4 314 600 9.8 30 800 10.8 1.7
Professionals 191 500 6.3 234 500 7.3 43 000 22.5 3.4
Associate professionals 583 000 19.2 737 200 22.9 154 300 26.5 4.0
Clerks 586 500 19.4 515 100 16.0 -71 400 -12.2 -2.1
Service workers and shop sales workers
430 800 14.2 461 700 14.3 31 000 7.2 1.2
Skilled agricultural and fishery workers
9 700 0.3 6 600 0.2 -3 100 -31.7 -6.2
Craft and related workers 291 800 9.6 278 900 8.7 -12 900 -4.4 -0.8 Plant and machine operators
and assemblers
235 100 7.8 225 500 7.0 -9 600 -4.1 -0.7
Elementary occupations# 417 100 13.8 448 300 13.9 31 200 7.5 1.2 All occupation categories 3 029 400 100.0 3 222 700 100.0 193 300 6.4 1.0
Notes : (#) Examples are cleaners, messengers, watchmen and general labourers.
Figures may not add up exactly to the total due to rounding.
5 8 3
2 9 2
2 3 5 3 1 5
7 3 7
5 1 5
4 6 2
7 2 8 4
4 1 7
1 9 2
5 8 6
4 3 1
1 0
2 7 9
2 2 6
4 4 8
2 3 5
0 1 0 0 2 0 0 3 0 0 4 0 0 5 0 0 6 0 0 7 0 0 8 0 0
M a n a g e r s a n d a d m i n is tr a t o r s
P ro fe s s i o n a ls A s s o c ia t e p r o f e s s i o n a ls
C le r k s S e r v i c e w o r k e rs a n d
s h o p s a le s w o r k e rs
S k i lle d a g r i c u lt u r a l a n d f i s h e r y w o r k e rs
C r a f t a n d r e la te d w o r k e rs
P la n t a n d m a c h i n e o p e r a to rs a n d
a s s e m b le r s
E le m e n t a r y o c c u p a ti o n s
'0 0 0
2 0 0 1 ( a c tu a l e m p lo y m e n t)
2 0 0 7 ( p r o j e c te d m a n p o w e r r e q u ir e m e n t)
14. Thus the share of managers and administrators, professionals and associate professionals in overall manpower requirement is projected to reach 40%
in 2007, up from 35% in 2001. On the other hand, the share of lower-skill workers is projected to decline, from 65% in 2001 to 60% in 2007.
Diagram 3 : Manpower requirement by occupation category, 2001 and 2007
Managers and administrators
9%
Professionals 6%
Clerks 19%
Elementary occupations 14%
Service workers and shop sales
workers 14%
Plant and machine operators and
assemblers 8%
Craft and related workers
10%
Skilled agricultural and fishery workers
0.3%
Associate professionals 19%
Personnel at the upper segment (35%)
Personnel at the lower segment (14%)
Professionals 6%
Managers and administrators
9%
Elementary occupations 14%
Clerks 19%
Service workers and shop sales
workers 14%
Plant and machine operators and assemblers
8%
Craft and related workers 10%
Skilled agricultural and fishery workers
0.3%
Associate professionals 19%
Personnel at the upper segment (35%)
Personnel at the middle segment (51%)
Personnel at the lower segment (14%)
Professionals 7%
Elementary occupations 14%
Plant and machine operators and assemblers
7%
Associate professionals 23%
Skilled agricultural and fishery workers
0.2%
Craft and related workers 9%
Managers and administrators
10%
Service workers and shop sales
workers 14%
Clerks 16%
Personnel at the upper segment (40%)
Personnel at the middle segment (46%)
Personnel at the lower segment (14%)
Diagram 4 : Actual employment by occupation category, 2001
Projected manpower requirement by occupation category, 2007
15. On manpower requirement by individual occupation categories, the following results are noteworthy :
¾ Of all the major occupation categories, manpower requirement for associate professionals(6), especially those engaged in sales/marketing function for developing markets in Hong Kong and the Mainland, is expected to have the most appreciable growth, along with China’s accession to WTO. Specifically, manpower requirement for this particular occupation category is projected to grow at an average annual rate of 4.0% over 2001-07. In absolute terms, this means an increase of 154 300 jobs over the period. The increase is expected to be more apparent amongst associate professionals engaged in the wholesale, retail and import/export trades, restaurants and hotels, in financing, insurance, real estate and business services, and in community, social and personal services (Annex 4).
¾ Manpower requirement for professionals is also projected to grow appreciably, at an average annual rate of 3.4% over 2001-07. This will translate into a gain of 43 000 jobs. The increase is expected to be more distinct amongst professionals engaged in financing, insurance, real estate and business services and in community, social and personal services.
¾ In tandem with more tourist attractions being developed in Hong Kong, particularly the opening of Hong Kong Disneyland, manpower requirement for service workers and shop sales workers will also be on the rise. A modest average annual growth rate of 1.2% is projected over 2001-07, with an addition of 31 000 jobs concentrating in the community, social and personal services and in the wholesale, retail and import/export trades, restaurants and hotels sectors.
(6) Associate professionals are known to straddle a wide range of occupation categories.
These include technicians, supervisors, survey interviewers, electrical draughtsmen, sales representatives, insurance brokers, merchandisers, marketing officers and assistants, estate officers, quality controllers, computer graphic designers, credit analysts, Chinese medicine practitioners, dispensers, nurses, etc.
¾ For workers in elementary occupations, manpower requirement is likewise projected to grow modestly, at an average annual rate of 1.2% over 2001-07. This increase, with 31 200 additional jobs, is likely to be concentrated mostly in real estate and certain business services.
¾ In contrast, a shrinkage in demand is envisaged for clerks, as there is further scope for office automation and relocation. The decrease, at an average annual rate of 2.1% or by 71 400 jobs over the medium term, is likely to be concentrated in the wholesale, retail and import/export trades, restaurants and hotels, in the financing, insurance, real estate and business services, and in the manufacturing sectors.
¾ Demand for craft and related workers and plant and machine operators and assemblers is also projected to decline, predominantly in the manufacturing sector. For these two groups, the average annual rate of decline over the medium term is projected at 0.8% and 0.7% respectively, corresponding to 12 900 and 9 600 jobs.
¾ As to skilled agricultural and fishery workers, manpower requirement is projected to contract at an average annual rate of 6.2% over 2001-07. Yet the number of jobs thereby reduced is relatively small, at about 3 000.
(iii) Projection of manpower requirement by educational attainment within occupation category
16. Future manpower requirement is expected to shift more towards the upper end of the educational attainment ladder, in tandem with Hong Kong’s progressive transformation into a knowledge-based economy.
17. Analysed by educational attainment, manpower requirement at nearly all levels except upper secondary and lower secondary and below is projected to grow markedly between 2001 and 2007. More specifically, manpower requirement for workers at sub-degree level and above is projected to grow strongly, at an average annual rate of 6.8% or by 282 800 jobs over 2001-07. On the other hand, manpower requirement for workers at the secondary level and
below is projected to decline, at an average annual rate of 1.3% or by 166200 jobs over 2001-07. Consequently, the share of the former group of workers in overall manpower requirement is projected to increase significantly, from 19% in 2001 to 27% in 2007, while the share of the latter group of workers is projected to drop distinctly, from 71% to 61%.
Table 3 : Projected manpower requirement by educational attainment
Educational attainment
Actual employment in 2001
Projected manpower requirement
in 2007 Change in 2007 over 2001
Number % share Number % share Number % change
Average annual
% change Lower secondary and below 1 212 200 40.0 1 102 700 34.2 - 109 500 -9.0 - 1.6 Upper secondary 933 100 30.8 876 400 27.2 - 56 700 -6.1 - 1.0
Matriculation 200 600 6.6 252 700 7.8 52 000 25.9 3.9
Craft 10 500 0.3 14 600 0.5 4 100 39.0 5.6
Technician 86 100 2.8 106 600 3.3 20 500 23.8 3.6
Sub-degree 127 200 4.2 207 100 6.4 79 900 62.8 8.5
First degree 379 200 12.5 538 500 16.7 159 300 42.0 6.0
Postgraduate 80 400 2.7 124 100 3.8 43 600 54.3 7.5
All education levels 3 029 400 100.0 3 222 700 100.0 193 300 6.4 1.0
Note : Figures may not add up exactly to the total due to rounding.
201
379
80 1103
253
15
107
207 1212
933
11
86 127
538
124 876
0 200 400 600 800 1 000 1 200 1 400
Lower secondary and below
Upper secondary
M atriculation Craft Technician Sub-degree First degree Postgraduate
'000
2001 (actual em ployment)
2007 (projected manpower requirem ent)
Diagram 5 : Manpower requirement by educational attainment, 2001 and 2007
Postgraduate 3%
First degree
13% Technician
3%
Matriculation 7%
Upper secondary 31%
Craft 0.3%
Lower secondary and below
40%
Sub-degree First degree 4%
and above (15%)
Post-secondary (14%)
Upper secondary (31%)
Postgraduate 4%
Upper secondary 27%
Matriculation 8%
Technician 3%
Craft 0.5%
First degree 17%
Lower secondary and below
34%
Sub-degree 6%
First degree and above
(21%) Post-secondary
(18%)
Upper secondary (28%)
Diagram 6 : Actual employment by educational attainment, 2001
Projected manpower requirement by educational attainment, 2007
18. A more detailed breakdown of the above projection by occupation category shows a continuous rise in demand for higher-skill and better-educated workers virtually across-the-board, in line with the orientation towards a knowledge-based economy (Annex 5).
19. For workers at the upper segment of the occupation hierarchy, increase in share in total manpower requirement is generally expected to be more visible at sub-degree education and above. For workers at the middle and lower segments, increase in share in total manpower requirement is expected to be concentrated more at the relatively lower education levels. Yet manpower requirement for workers with lower secondary education and below is predicted to decline for all occupation categories.
20. Of closer note is the projected upward shift in demand for managers and administrators more towards persons at first degree level and above, for associate professionals more towards persons at sub-degree level and above, for clerks more towards persons at post-secondary level, as well as for craft and related workers, plant and machine operators and assemblers, and workers in elementary occupations all more towards persons at upper secondary level.
Table 4 : Projected significant change in share of
manpower requirement by educational attainment within occupation category between 2001 and 2007
Educational attainment within occupation category with
significant projected change in % share
Occupation category Increase > 2 % points Decrease > 2 % points Managers and administrators ˙ FD ( + 5.9 ) ˙ LS ( - 4.8 )
˙ PG ( + 2.8 ) ˙ US ( - 4.7 )
Professionals ˙ PG ( + 4.3 ) -
Associate professionals ˙ FD ( + 7.0 ) ˙ LS ( - 2.2 )
˙ SD ( + 4.8 ) ˙ US ( - 9.4 )
Clerks ˙ FD ( + 3.6 ) ˙ US ( - 9.0 )
˙ SD ( + 3.1 )
˙ MA ( + 2.8 ) Service workers and shop sales
workers
˙ MA ( + 3.5 ) ˙ LS ( - 6.0 )
Craft and related workers ˙ TE ( + 3.2 ) ˙ LS ( - 8.9 )
˙ US ( + 3.1 ) Plant and machine operators and
assemblers
˙ US ( + 2.7 ) ˙ LS ( - 3.7 )
Elementary occupations ˙ US ( + 5.6 ) ˙ LS ( -7.7 )
Notes : (1) LS = lower secondary and below US = upper secondary MA = matriculation TE = technician SD = sub-degree FD = first degree PG = postgraduate
(2) Figures in brackets are the projected changes in percentage share at the specific educational attainment between 2001 and 2007.
