Hong Kong Industry Statistics: A Guide for U-Grads and RE Agents

Stephen Chung

Managing Director

Zeppelin Real Estate Analysis Limited

August 2006

Your humble author has recently looked at some figures on various industries such as the number of establishments, the people employed, the revenue made, the salary offered, and the like. The government statistical department is the main source and the data generally goes from 2000 to 2004. Here are some of the highlights categorized by industry type, bearing in mind these are average numbers:

A)     Using 2004 figures, the highest average number of employees per establishment is 322 while the lowest is less than 3 = the former goes to the air transport industry while the latter credits the land freight industry. At a glance, most industries range within having a few to no more than 18 employees. Others such as the ocean / sea transport, finance, insurance, and hospitality industries have a few dozens staff on average.

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B)     The highest average revenue (or turnover) per establishment is HK$800M plus while the lowest is less than HK$2M = and the award again goes to the air transport industry in the former group and land freight in the latter. Most range within a few HK$M to a few HK$10M.

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C)     The highest average compensation per employee is around HK$675,000 and the lowest is around HK$111,000 = and the award goes to the financing industry in the former group and the restaurant industry in the latter. Most tend to range between the mid HK$100K and mid HK$200K.

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D)     The highest average revenue (or turnover) per employee is around HK$5.50m and the lowest is roughly HK$350,000 = and these belong to the import & export industry and the restaurant industry respectively, noting however that revenue / turnover figure in some cases may contain costs of goods being traded etc thus implying probable skews.

Simply reading the foregoing might lead you to think of approaching those industries (i.e. the companies with them) with the highest average number of employees per establishment for jobs or business opportunities, as they seem to have the highest turnover as well. High turnover means high salaries and compensation packages, right? Or at least it seems to be so. Here are some insights based on the spectrum of industries observed here:

1)      There is a very high correlation between the average employees per establishment figure and the average revenue / turnover per establishment figure = the R2 is around 0.97.

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2)      BUT there is very little correlation between the average compensation per employee figure and the average revenue / turnover per establishment figure = the R2 is only 0.13.

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3)      THE SAME goes for the correlation between the average compensation per employee figure and the average employees per establishment figure = the R2 is 0.08.

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4)      EVEN the correlation between the average revenue / turnover per establishment figure and the average revenue / turnover per employee is weak = the R2 is 0.05.

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5)      Gross Return% = we have also looked at the relationship between the gross return % to some of the foregoing averages and found there is no or little correlation between the gross return % and aspects such as the average revenue / turnover per establishment or for that matter the average compensation per employee.

In short, for university graduates and job seekers, going for an industry that has big companies (in terms of number of employees) and big revenue / turnover does not automatically mean your job would command a good (or for that matter a bad) salary. The industry scale and turnover tell little if any. Likewise, for real estate agents, it could be a misconception to think just because a certain industry harbors big companies with big turnovers, its companies could afford higher than average rents.

Having said so, please note the foregoing does not include all industries and that it is a study across industries, not within them i.e. there is a probability, subject to actual study, that the bigger companies within the industry do earn more and / or offer higher salaries.

 

Notes: The article and/or content contained herein are for general reference only and are not meant to substitute for proper professional advice and/or due diligence. The author(s) and Zeppelin, including its staff, associates, consultants, executives and the like do not accept any responsibility or liability for losses, damages, claims and the like arising out of the use or reference to the content contained herein.                   

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