HONG KONG – Companies in this massive city are expected to hire new staff in the first quarter, reflecting confidence in the economy’s growth that has helped slash the unemployment rate here to its lowest level in nearly three years.

The growth in hiring, however, seems to be nearing its peak and may slow somewhat later in the year, based on the results of a survey on employment trends released by Hudson Global Resources.

Of the more than 600 Hong Kong employers surveyed in the report published by the U.S.-based human resources consultancy, 49.5% said they will increase staffing this quarter, up by nearly four percentage points from 45.7% recorded in the previous survey, which was conducted in October last year.

“It’s quite a positive start to the year for Hong Kong,” Hudson Global’s CEO for Asia Gary Lazzarotto said in an interview with Dow Jones Newswires. “The hiring levels that we have seen are very, very strong.”

Hong Kong’s employment situation has been steadily improving. The city’s unemployment rate declined to 6.5% in October-December last year, after hitting a record high of 8.7% in mid-2003.

The number of companies that seek to recruit new staff have also increased. That rate is now more than double the level recorded from a survey in the third quarter of 2003,and is also among the highest from the past five years.

“Hong Kong now seems to be one of the most confident economies in Asia right now in terms of hiring,” Mr. Lazzarotto said.

However, he said hiring expectations are currently approaching the peak of 50%, and expects a slight decline later in the year. Looking forward, Mr. Lazzarotto said he sees some limitations on Kong’s growth.

“I don’t expect we will see the same trajectory of growth later this year,” he said. “I don’t think the Hong Kong economy is that hot.”

The city’s economy has staged a strong recovery following several years of slow growth, expanding 7.5% in 2004, compared with only 3.2% in 2003.

But with growth in both America and China expected to slow this year, economists said Hong Kong’s externally driven economy will also face a slowdown. The city’s government indicated that a more normal growth rate for the gross domestic product would be in the mid-single digits.

For this year, Mr. Lazzarotto said that a hiring expectation rate hovering near the current levels will be healthy for the city’s economy. “Around 50% is probably a reasonable mark.”

Among the new jobs being created this quarter, sales staff are in the greatest demand, accounting for 32.4% of all jobs. Mr. Lazzarotto said this trend reflects an economy in Hong Kong which is still growing.

“When the economy picks up, when people realize that there’s money in the economy for sales, they will want to beef up their sales team quickly,” he said. “It’s really the front line of growing your business.”

As a result, Mr. Lazzarotto said companies still hold an optimistic outlook for Hong Kong.

“The view is still positive,” he said. “In particular, China is still providing the source of growth for the region.”