In Confidence to Members
OLCC(1977) 1B
FOREIGN AND COMMONWEALTH OFFICE
OVERSEAS LABOUR CONSULTATIVE COMMITTEE
ITEM 3: HONG KONG A NOTE ON LABOUR AND SOCIAL AFFAIRS
Economic Factors
This rate of
1. 1976 saw Hong Kong emerging from the worst recession in 30 years which lasted from 1973 until early 1975. The recovery was based on a very large increase in domestic exports. Increased world demand brought the value of Hong Kong's domestic exports for 1976 to a level 43% higher than that for 1975. The increase in volume of exports in 1976 compared with 1975 was 28%. growth cannot be a continuing phenomenon. The Financial Secretary in a footnote to his Budget Speech indicated that the percentage share of manufacturing industry in the GDF is likely to fall. 1976 reflects the rapid recovery from the very low economic ebb of early 1975.
2. The rise in the consumer price index in 1976 was only 3.4%.
Employment
3.
A reduction in the incidence of unemployment occurred in 1976, consistent with the upturn in the economy. The unemployment rate in September 1976 was estimated at 4.6%, compared with 9.1% and 5.6% in September 1975 and March 1976 respectively. Employment in manufacturing, the largest sector in Hong Kong in terms of both employment and output, increased rapidly in 1975 and 1976, totalling 773,746 in December 1976 which was 14% higher than in December 1975 and 8% higher than the average for 1973, the previous peak year.
Wages
4. Wages in the manufacturing sector increased rapidly in the second half of 1975, showing as much the sharp decline in real wages which had occurred between 1973 and the first half of 1975, as the strength of demand for labour. Increases in 1976 have not been as fast. In September 1976 normal average daily wages (excluding fringe benefits) were 5% higher than in March of the same year and 17% higher than in September 1975. Including fringe benefits, normal average daily wages in September 1976 were 5% higher than March 1976 and 16% higher than in September 1975. Real average daily wages (excluding fringe benefits) in September 1976 were 3% higher than real wages in March 1976 and 12% higher than in September 1975. Real wages in this sector of the economy are now nearly back to the March 1973 level. In September 1976 the average daily wage paid was about HK$ 31.
1
/Hours of Work