15.
(b)
Pressure of domestic demand
But what is really worrying me, and obviously some.
honourable Members too, is the present imbalance in the supply
of, and demand for, real domestic resources of land, labour_and
capital. There is no doubt that demand is out-running available supply with the result that prices are being competitively bid up and, as a further reflection of this, retained imports are
growing very fast, in fact roughly twice as fast as domestic
exports.
16.
The imbalance is particularly noticeable in the case
of the property market. I say this because there is no evidence that private sector demand for new property is yet being satisfied. Consents to developers to commence work were 16% higher in terms of floor area in the first nine months of this
year than in the same period last year, at a time when the increase in the labour and material cost index is accelerating,
and at a time when the demands on the building and construction
industry have pushed the PWD's tender price index up by 23% in the first nine months of this year compared with the same period
last year.
17.
IX. 1:
a
An important factor affecting the supply price of new
private property is the growing demands being placed on the
building and construction industry by the public sector, defined
in national accounts terms to include the MTR project. This
sector is now taking an increasing share of the output of the
industry: in the first six months of this year, public sector
expenditure on building and construction was 35% higher in real
terms than in the same period last year, whilst private sector
expenditure was only 8% higher. As a consequence, the public → sector is now taking about half the total output of the building and construction industry, compared with 42% in the first six months of last year and an average of 39% over the four year
period 1973 to 1976.
f
J
/18.
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9