THE ECONOMY
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terms, in 1992. The major sources of Hong Kong's imports were China, Japan, Taiwan, the USA, the Republic of Korea and Singapore. The slower growth in imports in 1993 was largely attributable to the less rapid rise in re-exports and the more moderate increase in imports retained for local use.
Retained imports increased by only three per cent in value terms, or by about four per cent in real terms. Among the various end-use categories, retained imports of consumer goods, food, capital goods and raw materials and semi-manufactured goods increased by about 10 per cent, two per cent, one per cent and one per cent, respectively, in real terms. But retained imports of fuels fell by nine per cent in real terms.
With the value of total exports (domestic exports plus re-exports) smaller than that of imports, a visible trade deficit of $26 billion, equivalent to 2.5 per cent of the total value of imports, was recorded in 1993. This compared with a deficit of $30 billion, equivalent to 3.2 per cent of the total value of imports, recorded in 1992. As the prices of total exports declined at a slower rate than those of imports in 1993, the terms of trade showed a small improvement.
Domestic Demand
Domestic demand recorded further solid growth of five per cent in real terms in 1993, following a 10 per cent growth in 1992. Against the background of full employment and - rising real incomes, private consumption expenditure registered a further significant increase of seven per cent during the year, having risen by eight per cent in 1992. Government consumption expenditure, on the other hand, recorded only a modest increase of two per cent (in national accounts terms). Investment demand, measured in terms of gross domestic fixed capital formation, grew by five per cent in real terms in 1993, following a 10 per cent increase in 1992. Among its major components, expenditure on building and construction recovered significantly to register an increase of 14 per cent in real terms in 1993, following virtually no growth in 1992. The pick-up was mainly attributable to the acceleration in work on a number of major infrastructural projects in the public sector. Expenditure on machinery and equipment consolidated, however, registering an increase of six per cent in real terms in 1993, compared with 22 per cent in 1992.
The Labour Market
The labour market tightened slightly in the latter part of 1993, after a temporary easing earlier in the year. In the fourth quarter, the seasonally-adjusted unemployment rate was two per cent, the same as that in the third quarter but 0.1 of a percentage point lower than that in the same quarter in 1992. The under-employment rate, at 1.5 per cent, was 0.2 of a percentage point higher than that in the third quarter and 0.5 of a percentage point lower than that in the same quarter in 1992.
Continuing the shift to the services sector, employment in the manufacturing sector decreased by 11 per cent from the level of a year earlier to 508 100 in September 1993, with vacancies also declining markedly by 26 per cent over the same period to 14 100. Offsetting this, employment in the services sector as a whole increased by six per cent to 1 722 900, and vacancies also rose, by three per cent to 55 800. In the services sector, employment in the wholesale, retail and import and export trades increased by eight per cent; that in