TUESDAY, MAY 26, 1987
THE LATEST FIGURES ON RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES, AND INDUSTRIAL MACHINERY AND ON THE ORDER BOOK POSITIONS OF LARGE MANUFACTURERS SUGGEST THAT DOMESTIC EXPORT PERFORMANCE IS LIKELY TO REMAIN GOOD IN THE COMING MONTHS.
RE-EXPORTS GREW BY ABOUT 49 PER CENT IN REAL TERMS IN THE FIRST QUARTER OF 1987 COMPARED WITH THE SAME QUARTER IN 1986. AS RE-EXPORTS GREW AT A FASTER RATE THAN DOMESTIC EXPORTS, THE SHARE OF RE-EXPORTS IN TOTAL EXPORTS ROSE TO 49 PER CENT IN THE FIRST QUARTER OF 1987 FROM 45 PER CENT IN THE SAME QUARTER LAST YEAR.
DOMESTIC DEMAND, IN RESPECT OF BOTH CONSUMPTION AND INVESTMENT, WAS STRONG IN THE FIRST QUARTER OF 1987. THE YEAR-ON-YEAR GROWTH RATE IN REAL TERMS FOR RETAINED IMPORTS OF BOTH FOODSTUFFS AND CONSUMER GOODS WAS ABOUT 9 PER CENT.
REFLECTING THE OPTIMISTIC BUSINESS OUTLOOK, MANUFACTURING INVESTMENT WAS MAINTAINED AT A HIGH LEVEL, AS INDICATED BY THE ESTIMATED 24 PER CENT GROWTH IN REAL TERMS IN RETAINED IMPORTS OF INDUSTRIAL MACHINERY FOR USE IN THE MANUFACTURING SECTOR IN THE FIRST QUARTER.
AGAINST THE BACKGROUND OF A BUOYANT ECONOMY, THE DEMAND FOR LABOUR WAS STRONG AND OUTSTRIPPED SUPPLY IN THE FIRST QUARTER OF 1987. AS A CONSEQUENCE, BOTH THE UNEMPLOYMENT AND UNDEREMPLOYMENT RATES WERE AT VERY LOW LEVELS.
THE STRONG AGGREGATE DEMAND WITHIN THE ECONOMY COUPLED WITH THE DELAYED EFFECT OF THE INCREASES IN IMPORT PRICES DURING 1986 HAVE PUSHED UP THE RATE OF INFLATION. USING CONSUMER PRICE INDEX (A) AS AN INDICATOR, THE RATE OF INFLATION ACCELERATED TO 4.3 PER CENT IN THE FIRST QUARTER OF 1987 FROM 3.6 PER CENT IN THE FOURTH QUARTER OF 1986.
THE REPORT ASSESSES DEVELOPMENTS IN THE ECONOMY IN THE FIRST · QUARTER OF 1987 USING SUCH STATISTICS AS ARE AVAILABLE. IT ALSO UPDATES THE ANALYSIS OF THE ECONOMY WHICH WAS GIVEN IN THE 1986 ECONOMIC BACKGROUND PUBLISHED ON BUDGET DAY. APART FROM GIVING AN OVERALL VIEW, THE REPORT ALSO CONTAINS INDIVIDUAL CHAPTERS ON THE EXTERNAL SECTOR, THE FINANCIAL SECTOR, THE LABOUR SECTOR, ACTIVITY IN SELECTED SECTORS, AND PRICES.
ON THE EXTERNAL SECTOR, THE REPORT NOTES THAT DOMESTIC EXPORTS TO MOST MAJOR MARKETS GREW RAPIDLY IN THE FIRST QUARTER OF 1987 COMPARED WITH THE SAME QUARTER IN 1986.
ALTHOUGH CHINA'S IMPORT CONTROL MEASURES STILL REMAINED IN FORCE, THE GROWTH IN DOMESTIC EXPORTS TO CHINA INCREASED SUBSTANTIALLY, BY ABOUT 75 PER CENT IN REAL TERMS, IN THE FIRST QUARTER OF 1987 OVER THE SAME QUARTER IN 1986.
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