THE ECONOMY
demand conditions in the overseas markets. Moreover, through increased outward processing arrangements in the Mainland, Hong Kong's productive capacity has effectively been expanded by multiples, which has helped maintain the price competitiveness of its products. A predominant proportion of Hong Kong's manufacturing output is destined for export.
Besides relocating the more labour-intensive production processes to the Mainland, Hong Kong's manufacturers have also been striving hard to diversify their products. and markets, in face of increased challenges from globalisation of trade and keener competition from other export producers. Concurrently, productive efficiency and product quality have been continuously upgraded by incorporating more advanced skills and technology.
Within the local manufacturing sector, textiles and clothing remain the most important industries, notwithstanding continued decline in their relative significance over the years. Other major industries include machinery and equipment, printing and publishing, electronics, food processing and metal products. Generally speaking, those manufacturing operations still remaining in Hong Kong are more knowledge- based and engender higher value-added with a greater technology content. Between 1991 and 2001, labour productivity in the local manufacturing sector, as measured by the ratio of the industrial production index to the manufacturing employment index, rose markedly, by an average of about 9 per cent per annum (Chart 6).
Chart 6
Output per person engaged in the local manufacturing sector (March 1991 = 100)
Index
350
300
250
200
150
100
50
0
1989 1990 1991 1992 1993
1994 1995 1996 1997 1998 1999 2000 2001
**
Labour productivity in the local manufacturing sector has remained generally on an uptrend over the past decade.
* Average of QI to Q3 2001.
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