Chart 11
THE ECONOMY
Main components of domestic demand (year-on-year rate of change in real terms)
20
15
Per cent
Investment expenditure in terms of gross domestic fixed capital formation
10
5
0
-5
-10
-15
Private consumption expenditure
Government
consumption expenditure
-20
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Local consumer spending slackened in 2002, as consumer sentiment was dampened by high unemployment, moderated income and soft asset prices. Concurrently, overall investment spending weakened, as expenditure on machinery, equipment and computer software plummeted amidst an uncertain business outlook and an overhang of excess capacity. As for government consumption expenditure, the growth rate in the year was modest.
54
Net Output or Value Added by Economic Activity
In the first three quarters of 2002, the net output or value added of the services sector as a whole was 2.0 per cent higher in real terms than a year earlier, modestly exceeding the 1.6 per cent increase in 2001. Analysed by constituent sectors and on a year-on- year comparison in real terms, net output in transport, storage and communications rose by 3.2 per cent in the first three quarters of 2002, underpinned by a further growth in international telephone and mobile phone traffic volumes, as well as by an expansion in cargo handling activity upon a rebound in external trade. In addition, net output in the wholesale, retail and import/export trades, restaurants and hotels. increased by 1.8 per cent, along with an upturn in trade-related services and inbound tourism. Net output in community, social and personal services also went up by 0.8 per cent, mostly attributable to increases in education and social welfare services. Net output in financing, insurance, real estate and business services edged up by 0.4 per cent, as increased real estate and insurance businesses were virtually offset by reduced financing and business services.
On the other hand, net output in the local manufacturing sector continued to decline, by 9.4 per cent in real terms in the first three quarters of 2002 over a year earlier, further to a 8.6 per cent fall in 2001. The weak performance of domestic exports and an ongoing relocation of production processes outside Hong Kong were the major dampening factors. As to the construction sector, net output went up by 1.2