FRIDAY, AUGUST 27, 1982
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ON THE FINANCIAL SECTOR, THE REPORT SHOWS THAT THE UNDERLYING GROWTH RATES OF THE MONEY SUPPLY AND OF DOMESTIC CREDIT WERE SLOWING DOWN,
FOREIGN CURRENCY DEPOSITS IN HONG KONG SHOWED A SUBSTANTIAL INCREASE DURING THE FIRST HALF OF 1982, LARGELY AS A RESULT OF THE ABOLITION OF THE 15 PER CENT WITHHOLDING TAX ON INTEREST PAID ON SUCH DEPOSITS AS FROM FEBRUARY 25, WHILE HONG KONG DOLLAR DEPOSITS SHOWED A SLIGHT DECREASE. THERE WAS ALSO A MARKED SHIFT OF DEPOSITS FROM DEPOSIT-TAKING COMPANIES TO BANKS.
THE REPORT ALSO NOTES THAT DOMESTIC INTEREST RATES REMAINED RELATIVELY STABLE IN THE FIRST HALF OF THIS YEAR. WHILE THE EXCHANGE VALUE OF THE HONG KONG DOLLAR AS MEASURED BY THE TRADE-WEIGHTED EXCHANGE RATE INDEX STRENGTHENED, IT DEPRECIATED SLIGHTLY IN TERMS OF THE US DOLLAR.
ON THE LABOUR SECTOR, THE REPORT INDICATES THAT THERE WAS A MARGINAL INCREASE IN THE UNEMPLOYMENT RATE TO 3.5 PER CENT IN MARCH 1982 FROM 3.1 PER CENT IN DECEMBER 1981.
THE REPORT POINTS OUT THAT WHILE EMPLOYMENT IN THE MANUFACTURING SECTOR SHOWED NO NET INCREASE IN THE FIRST HALF OF 1982, WAGE RATES IN THE MANUFACTURING SECTOR SHOWED SOME IMPROVEMENT IN REAL TERMS AS THE RATE OF INFLATION SLOWED DOWN. EMPLOYMENT IN THE TERTIARY SERVICES SECTORS CONTINUED TO INCREASE, AS DID SALARIES IN THESE SECTORS.
ACCORDING TO THE REPORT, THE SLIGHT DECLINES IN EMPLOYMENT IN MANUFACTURING, IN DOMESTIC EXPORTS IN REAL TERMS AND IN RETAINED IMPORTS OF RAW MATERIALS, SEMI-MANUFACTURES AND CAPITAL GOODS INDICATE THAT ACTIVITY IN THE MANUFACTURING SECTOR HAS NOT GROWN IN THE FIRST HALF OF THE YEAR. THE REPORT FURTHER COMMENTS THAT THE SHORT-TERM OUTLOOK FOR THE MANUFACTURING SECTOR APPEARS TO BE UNFAVOURABLE AND THAT ANY RECOVERY IS LIKELY TO BE SLOW. THIS VIEW WAS CONFIRMED BY THE RESULTS OF THE QUARTERLY BUSINESS SURVEY CONDUCTED IN APRIL 1982 AND THE ORDER-BOOK POSITION OF A SELECTION OF LARGE MANUFACTURERS INCLUDED IN THE MONTHLY SURVEY ON EMPLOYMENT, PAYROLL AND ORDERS-ON-HAND.
ON THE PROPERTY SECTOR, THE REPORT NOTES THAT COMPLETIONS ALTHOUGH LESS THAN IN THE FIRST HALF OF 1981, REMAINED SUBSTANTIAL. BUILDING ACTIVITY ALSO REMAINED SUBSTANTIAL BUT FEWER BUILDING PLANS WERE APPROVED. WHILE THE PRICES AND RENTALS FOR PROPERTY IN GENERAL WERE EITHER THE SAME AS OR LOWER THAN IN THE SECOND HALF OF 1981, THE PRICES OF RESIDENTIAL PROPERTY HAVE DECREASED SUBSTANTIALLY SINCE THE SECOND HALF OF 1981. MORTGAGE RATES ALSO EASED, LEADING TO A SUBSTANTIAL REDUCTION IN MONTHLY MORTGAGE PAYMENTS. POTENTIAL BUYERS, HOWEVER, REMAINED CAUTIOUS IN ANTICIPATION OF A FURTHER DROP IN FLAT PRICES, AND IN VIEW OF THE UNCERTAINTIES CONCERNING GENERAL ECONOMIC CONDITIONS AND THE UNFAVOURABLE INFLUENCE ON WEALTH OF A SLUGGISH STOCK MARKET.
ON PRICES, THE REPORT OBSERVES THAT THE RATE OF INFLATION AS INDICATED BY THE VARIOUS CONSUMER PRICE INDEXES CONTINUED TO EASE OFF, FOLLOWING THE TREND THAT EMERGED IN THE FOURTH QUARTER OF 1981.
/THE REPORT