CONFIDENTIAL #3
G.F. 326
12
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Feedback from Industry Department
26.
Some qualitative information on recent trends in capital investment in the manufacturing
industries was obtained by the Industry Department during regular factory visits and from contacts with
manufacturers. The information, which is largely
specific in nature and probably subjective, is
summarised below :
(i) The overall investment situation in the
third quarter of 1989 was relatively
quiet. Local manufacturers were generally adopting a cautious attitude in making further investments, although in certain
industries investment activity was still
maintained. Apart from the impact of the June events in China, contributory factors include the slow-down of the world economy,
protectionist sentiment in the major overseas markets, and the sluggish
performance of Hong Kong's domestic exports
since the second quarter.
(ii) Investment in the textiles and clothing industries showed a mixed picture.
Investment in the spinning and weaving
sector was mainly for replacement purposes,
while investment in the cut-and-sewn
garment sector was steady. As regards the knitwear sector, a major supplier of computerised knitting machines reported a
substantial decline in sales in the third
quarter over a year earlier. On the other hand, investment in the dyeing and
finishing sector was more active.
CONFIDENTIAL **