FRIDAY, AUGUST 8, 1975
FS CONFIDENT OF GRADUAL UPTURN IN ECONOMY
X X X X
THE FINANCIAL SECRETARY, MR. PHILIP HADDON-CAVE, TONIGHT SPOKE CONFIDENTLY OF A GRADUAL UPTURN IN THE ECONOMY IN THE LATTER PART OF THIS YEAR AND IN 1976. HOWEVER, HE CAUTIONED AGAINST EXPECTATIONS OF TOO EARLY A RECOVERY IN WORLD TRADE.
SPEAKING AT THE ANNUAL DINNER OF THE HONG KONG SOCIETY OF ACCOUNTANTS, HE SAID THAT ALREADY THIS YEAR, AND IN ADVANCE OF ANY GENERAL RECOVERY OF DEMAND IN OUR MAIN MARKETS,+ MANY MANUFACTURERS HAVE REPORTED AN IMPROVEMENT IN THE STATE OF THEIR ORDER BOOKS, PARTLY DUE TO SPOT ORDERS TO REPLENISH STOCKS.
A RECENT OFFICIAL SURVEY AMONGST SOME OF THE LARGEST MANUFACTURING FIRMS SHOWED AN INCREASE OF 13 PER CENT IN ORDERS-ON- HAND BETWEEN THE FIRST AND SECOND QUARTERS OF THIS YEAR.
IN
ALTHOUGH THE INCREASED ORDERS HAVE NOT YET BEEN RETLECTËD EXPORT DELIVERIES, THE FINANCIAL SECRETARY ADDED: MY JUDGMENT IS THAT MANUFACTURING PRODUCTION HAS PROBABLY STOPPED FALLING AND MAY BE PICKING UP.+
HE SAID THERE WAS EVIDENCE OF THIS IN THE STATISTICS OF ELECTRICITY CONSUMPTION BY INDUSTRIAL USERS WHICH, IN THE SECOND QUARTER OF THIS YEAR, INCREASED BY TWO PERCENT OVER THE SAME PERIOD LAST YEAR AFTER HAVING FALLEN FOR SOME TIME PREVIOUSLY.
THERE WAS ALSO EVIDENCE THAT EMPLOYMENT IN THE MANUFACTURING SECTOR WAS LEVELLING OUT AFTER FALLING BY 11 PER CENT IN THE 12 MONTHS TO DECEMBER 1974.
MR. HADDON-CAVE SAID REPORTS FROM INDUSTRY SUGGEST THAT A NUMBE OF FIRMS HAVE EXTENDED THEIR WORK WEEK, INCREASED SHIFT WORKING AND BEGUN RECRUITING AGAIN. THE NUMBER OF REDUNDANCIES REPORTED TO THE LABOUR DEPARTMENT FELL BY NEARLY HALF BETWEEN THE FIRST AND SECOND QUARTERS OF THIS YEAR.
THERE WAS ALSO SOME EVIDENCE THAT DOMESTIC DEMAND WAS NO LONGER FALLING, WITH CONSUMER SPENDING NOW BENEFITTING FROM THE STABILITY OF CONSUMER PRICES. ELECTRICITY CONSUMPTION BY DOMESTIC USERS HAS INCREASED BY 13 PER CENT IN THE FIRST HALF OF 1975 COMPARED WITH THE FIRST HALF OF LAST YEAR, AND NEW CAR REGISTRATIONS, WHICH HAS BEEN AT A VERY LOW LEVEL FOR TWO YEARS, PICKED UP IN THE SECOND QUARTER OF 1975.
MR. HADDON-CAVE HAD EARLIER POINTED OUT THAT INFLATION IN HONG KONG WAS ALMOST NON-EXISTENT AS A RESULT OF THE FAVOURABLE TREND IN DOMESTIC COSTS, THE EVEN MORE FAVOURABLE TRENDS IN MANY
IMPORT PRICES AND THE GOVERNMENT'S NON INFLATIONARY FISCAL POLICIES.
IN THE SECOND QUARTER OF THIS YEAR, CONSUMER PRICES WERE ONLY TWO PER CENT HIGHER THAN A YEAR AGO. COMPARED WITH THE SECOND QUARTER OF 1974 WHEN THEY WERE 17-1/2 PER CENT ABOVE THOSE OF THE CORRESPONDING QUARTER IN 1973.
/HOWEVER, THE