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Our economic policy recognises that market forces allow Hong Kong's economy to respond far more efficiently and effectively to changing circumstances than any intervention could ever do. It is no accident that despite enormous changes to its economy during the 1980s, Hong Kong suffered remarkably little disruption to employment or to the overall growth in our economy by comparison with many other economies.
Between 1982 and 1994, our manufacturing workforce halved, while industry's contribution to GDP fell from 20% to just over 11%. In many other countries, this rapid change would have spelled disaster. Not in Hong Kong. During the same period, total employment increased from 2.4 million to 2.9 million, an increase of 21%. During the same period, per capita GDP increased in real terms by 80%.
With such a large shift in the economy, it would be surprising if there was no dislocation. Indeed, in an economy as open as ours to the shifting business cycles of our trading partners, cyclical variations in the pattern of labour demand are inevitable. But our economic policy minimises these imbalances and helps to ensure that they are quickly corrected. For example, while the unemployment rate rose to a cyclical high of 4.1% in 1983, it then dropped quickly, falling to 2.6% in 1986, and further to 1.9% in 1987. We firmly believe that remaining true to our basic economic philosophy will be the quickest way of remedying the present problems.
By the same token, we do not agree that there is a need, or that it is desirable, for the Government to intervene to bring down rentals, be they for office, commercial or industrial space. On the contrary, we believe that prices and rentals for office space should continue to be adjusted by market forces. In this connection, it should be clear that what is a reasonable price, what is a reasonable rental, is one that is set by the free-playing of market forces, or by supply and demand. In the case of office accommodation, an additional 500,000 square metres of new office space was completed in 1994, representing an increase of 22% over 1993; and it appears that office prices and rentals are already softening. Large amounts of office space will become available in the next two years, with a further boost from developments connected with the airport railway and reclamation projects, which will certainly include a significant supply of commercial and industrial space. If we were to take precipitate action to reduce rentals, we would simply make it less attractive to construct new buildings, thereby reducing the supply in years to come.