Thursday, March 14, 1974
Turning to the problem now being faced by the manufacturers,
Mr. Ann said the raw material stocks acquired at advantageous price
levels were diminishing.
"To replenish stocks at the present unprecedented high level
makes any sensible enterpreneur shiver, because some raw materials have
already gone up by 150 per cent, some 200 per cent and some 300 per cent
since 1972," he added.
"In the pricing of primary commodities or so to say their market
habit, after a straight uptrend the next stage is often not a plateau.
It could be an accelerated upward movement or turn to a continuous downtrend.
Both are horrible and daunting."
He pointed out that for some staple items, at the present mcment
raw material prices were higher than manufacturers could allow for their
raw material cost, or their lowest selling prices of the manufactured
goods would be higher than overseas buyers were willing or ready to pay.
This is a serious problem for Hong Kong, said Mr. Ann, because
the manufacturing industry is the largest employer and bread earner in
the first degree.
:
"When inflation hurts manufacturers those of them nearest to the
direct consumers feel the pinch first. People will buy things which they
think still relatively cheap but when they start to resist rising prices,
recossion is in the making."
On the approved housing plans, Mr. Ann said it must go ahead at
full steam despite all difficulties and in view of the slowdown of
buildings in the private sector.
Mr. Ann