Hong Kong’s manpower shortage has narrowed from 180,000 to 130,000, largely thanks to a talent influx and the adoption of artificial intelligence, but skills shortages in key industries remain severe, an official manpower projection report revealed on Tuesday.

The Mid-term Update of Manpower Projection, published by the Labour and Welfare Bureau, said that the overall labor force in the Hong Kong Special Administrative Region would decrease from 3.47 million in 2025 to 3.4 million in 2028, due to population aging.

At a news conference, Undersecretary for Labour and Welfare Ho Kai-ming said that various talent policies and wider AI adoption have effectively narrowed the manpower gap. However, key industries — such as aviation and innovation and technology — will still face manpower shortages by 2028.

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Among these industries, construction will face the largest manpower supply-demand gap, with a shortage of 30,000 to 40,000 workers; city operations will need to make up 20,000 to 25,000; healthcare will lack 13,000 to 18,000; and manufacturing and new industry will be short by 5,000 to 10,000.

As AI becomes more widely adopted, companies tend to be more cautious when recruiting for junior positions, Ho said.

According to the report, about 20 to 30 percent of positions, primarily clerical, will face restructuring due to the increasing use of AI, while demand for AI experts — especially those with both AI application skills and sector-specific knowledge — continues to grow.

The report also revealed that the displacement of entry-level positions has slashed the number of job vacancies suitable for fresh graduates by around 60 percent compared to 2022, and about 70,000 middle-aged clerical support workers aged 45 to 54 without post-secondary education are facing transition pressures.

In a statement, Secretary for Labour and Welfare Chris Sun Yuk-han said in response to the changes in the labor market driven by AI, the SAR government will continue collaborating with all parties to formulate targeted measures.

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Officials also urged the labor force to actively upskill and transform. Proficiency in human-machine collaboration will become a basic competency, while soft skills that AI cannot replace — such as interpersonal communication, critical thinking, and problem-solving — will remain at the core of competitiveness, they said.

In addition to strengthening retraining mechanisms and providing flexible skill-conversion programs for elderly and middle-aged employees, the Labour and Welfare Bureau said it will enhance employment support for young graduates and explore incentives for employers and employees to engage in on-the-job retraining.

In a written reply, the Hong Kong Institute of Human Resource Management said the significant narrowing of the manpower shortage reflects a healthy structural adjustment in the local labor market.

The institute added that although various talent-attraction policies have met their targets, authorities need to continuously track the long-term retention rates of the talent. If these professionals leave the city after one to two years, the current manpower projection model may underestimate future manpower gaps.

Contact the writer at atlasshao@chinadailyhk.com