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MONDAY, MAY 26, 1986
ON THE LABOUR SECTOR, THE REPORT OBSERVES THAT, COMPARING DECEMBER 1985 WITH DECEMBER 1984, EMPLOYMENT IN THE MANUFACTURING SECTOR AND ON BUILDING AND CONSTRUCTION SITES DECREASED WHILE MPLOYMENT IN THE EXTERNAL AND DISTRIBUTIVE TRADE SECTORS AND IN THE FINANCE AND OTHER RELATED BUSINESS SERVICES SECTORS INCREASED. IN CONSEQUENCE, TOTAL EMPLOYMENT SHOWED LITTLE CHANGE DURING 1985, FOLLOWING AN INCREASE OF 5 PER CENT DURING 1984.
THE REPORT FURTHER SAYS THAT COMPARING DECEMBER 1985 WITH DECEMBER 1984, EARNINGS IN THE MANUFACTURING AND THE SERVICES SECTORS, IN TERMS OF PAYROLL PER PERSON ENGAGED, INCREASED SUBSTANTIALLY IN MONEY TERMS AND IN REAL TERMS. CONSTRUCTION WAGE RATES, WHICH HAD BEEN ON A DECLINING TREND FOR SOME TIME, ALSO RECORDED A SMALL INCREASE.
THE REPORT OBSERVES THAT MANUFACTURING ACTIVITY SLOWED DOWN IN THE FOURTH QUARTER OF 1985, SO THAT FOR THE YEAR AS A WHOLE, THE QUANTITY OF MANUFACTURING OUTPUT WAS 5 PER CENT LOWER THAN IN 1984. WITH THE EXCEPTION OF THE TEXTILES INDUSTRY, PRODUCTION IN ALL MAJOR INDUSTRIES DECREASED IN 1985.
ON THE PROPERTY SECTOR, THE REPORT NOTES THE FOLLOWING FEATURES. FIRST, THE RATE OF TAKE-UP FOR MOST TYPES OF FINISHED PROPERTY REMAINED AT A REASONABLY HIGH LEVEL IN 1985. APART FROM FLATTED FACTORIES, THE VACANCY RATES FOR ALL MAIN TYPES OF PROPERTY AT THE END OF 1985 WERE LOWER THAN A YEAR AGO.
SECOND, THE UPTREND IN PRICES AND RENTALS OF PROPERTY, WHICH STARTED IN MID-1984, APPEARS TO HAVE CONTINUED, ALBEIT AT A SLOWER RATE, IN LATE 1985 AND IN THE FIRST QUARTER OF 1986.
THIRD, DEMAND FOR PROPERTY APPEARS TO HAVE REMAINED FAIRLY STRONG, NOTWITHSTANDING THE SLOWER ECONOMIC GROWTH IN 1985.
ON PRICES, THE REPORT SAYS THAT THE LOW RATE OF INFLATION IN THE FIRST QUARTER OF 1986 WAS DUE TO A NUMBER OF FAVOURABLE DOMESTIC AND EXTERNAL FACTORS. FOR EXAMPLE, AGGREGATE DEMAND IN THE ECONOMY WAS NOT SO STRONG AS TO IMPOSE UNDUE PRESSURE ON THE AGGREGATE SUPPLY OF RESOURCES, THE RATES OF INFLATION IN HONG KONG'S MAJOR TRADING PARTNERS WERE MODERATE, AND WORLD COMMODITY PRICES GENERALLY AND PRICES OF CRUDE OIL AND OIL PRODUCTS IN PARTICULAR REMAINED SOFT.
NEVERTHELESS, THE REPORT CAUTIONED THAT TWO OTHER DEVELOPMENTS COULD HAVE ADVERSE EFFECTS ON THE PRICES OF IMPORTS INTO HONG KONG, AND HENCE ON CONSUMER PRICES.
FIRST, SINCE THE SECOND QUARTER OF 1985, THE HONG KONG DOLLAR, BECAUSE OF ITS LINK WITH THE U.S. DOLLAR, HAS BEEN DEPRECIATING AGAINST MOST MAJOR CURRENCIES, WITH THE IMPORTANT EXCEPTION OF THE RENMINBI.
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