Macau: Unemployment Rates during the past 8 years

Unemployment1

 

The DSEC has released their latest Labour Force Employment Survey (as of October 2013) and as the Macau Daily Times reported there had been two rises in the figure:

  • Overall unemployment went from 1.8% (2013 Q2) to 1.9% (2013 Q3)
  • Overall unemployment for local residents rose from 2.3% (Q2 2013) to 2.5% (Q3 2013)

However in order to put these figures into the right context one needs to look at the bigger picture and the overall employment situation throughout the years in Macau. Above graphic shows the overall unemployment rate on an annual basis from 2004 until today. As one can see unemployment dropped considerably from 4.9% in 2004 to 2.0% in 2012 with the exception of an unemployment “peak”of 3.5% during the financial crisis aftermath.

Let’s break down the above graphical representation into a quarterly distribution:

Unemployment2

 

Also here the Financial Crisis Peak is visible, yet other movements on the labor market show up with minor peaks on a quarter to consecutive quarter analysis. These are figures for the overall unemployment in Macau. Figures for unemployment of local residents are available from 2008 onwards, so the below graphic compares the unemployment rates from 2008 to 2013:

Unemployment4

 

As expected the rises and falls of each key figure line is similar. This means that irrespective of locals or non-locals, unemployment is going up or down in similar waves. The fact that unemployment is higher for local residents than for the overall labor force comes from the fact that the overall labor force is larger in mass than the local resident labor force and the fact that non-local workers are usually in Macau only because they have a job, i.e. are employed. Hence they would count as an employed labor.

In order to understand the development of unemployment in Macau further (on a purely figure-based method without looking at actual events) there are two key figures that need to be shown:

  • Unemployment development on a consecutive quarter basis (i.e. what happens from Q2 to Q3 of the same year)
  • Unemployment development on a quarter to quarter basis from adjacent years (what happens from Q2 2012 to Q2 2013)

The latter figure is thought to ensure that seasonal effects (such as harvest seasons, spikes of job switching after Chinese New Year, etc.) are eliminated in the comparison.

Unemployment5

Unemployment development on a consecutive quarter basis

As can be seen in general unemployment is decreasing quarter to consecutive quarter with the exception of the 2008 financial crisis and a number of minor other spikes. However looking at the second graph:

Unemployment6

Unemployment development on a quarter to quarter basis from adjacent years

it becomes clear that even those spikes of unemployment rising from quarter to consecutive quarter are still on a trend of a falling unemployment rate on a year to year basis. Exception here as well, the financial crisis 2008 and its aftermath.

These graphs being mathematical representations of a real labor work force market, it is clear that a falling trend cannot continue indefinitely. At some point of time a zero unemployment would be reached, or more realistically an unemployment around 1.0% to 0.5% with a mass of people either looking for jobs, switching jobs, recent graduates or the unemployable.

Especially with the upcoming construction and openings of Casinos in Cotai, it is expected for employment to rise and the unemployment rate to further fall.

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