XN000022-1981-03-14 — Page 2

SATURDAY, MARCH 14,

1981

ECONOMIC PROSPECTS FOR 1981 *****

THE CENSUS AND STATISTICS DEPARTMENT TODAY RELEASED THE RESULTS OF A SURVEY OF ECONOMIC PROSPECTS CONDUCTED IN JANUARY TO OBTAIN THE VIEWS OF MANAGEMENT IN THE MANUFACTURING AND CONSTRUCTION SECTORS ON BUSINESS OUTLOOK FOR THE YEAR 1981,

THE SURVEY COVERED A SAMPLE OF ABOUT 540 LARGE MANUFACTURING ESTABLISHMENTS, WITH FULL ENUMERATION ON THOSE ENGAGING 500 OR MORE PERSONS, AS WELL AS 64 LEADING CONSTRUCTION COMPANIES. THIS WAS ONE OF THE MAIN SOURCES OF INFORMATION FROM WHICH THE FINANCIAL SECRETARY DERIVED HIS RECENT FORECAST ON THE ECONOMY IN 1981,

ACCORDING TO THE MANUFACTURERS, THE AGGREGATE VOLUME OF OVERSEAS ORDERS WAS EXPECTED TO INCREASE BY ABOUT THREE PER CENT IN 1981 OVER THAT OF 1980. LOCAL ORDERS WERE EXPECTED TO INCREASE BY ONE PER CENT.

A GOVERNMENT SPOKESMAN OBSERVED THAT THE SURVEY FINDING IN RESPECT OF THE GROWTH RATE OF EXPORT ORDERS WAS LOWER THAN THE FORECAST GROWTH RATE OF DOMESTIC EXPORTS IN REAL TERMS, AT SEVEN PER CENT, GIVEN IN THE BUDGET SPEECH.

HE EXPLAINED THAT MANUFACTURERS' SENTIMENT TENDED TO BE AFFECTED BY MARKET CONDITIONS PREVAILING AT THE TIME OF THE SURVEY AND TO BE CONSERVATIVE, SO THAT THE ACTUAL OUTCOME COULD BE BETTER THAN PREDICTED. HE STRESSED THAT THIS HAD BEEN THE FINDING WHEN COMPARING THE RESULTS OF PREVIOUS SURVEYS WITH THE EXPORT PERFORMANCE ACTUALLY ATTAINED SUBSEQUENTLY.

MANUFACTURERS WERE OF THE OPINION THAT EXPORT PROSPECTS FOR THE SECOND HALF OF THIS YEAR WOULD BE BETTER THAN THOSE FOR THE FIRST HALF. THEY EXPECTED THAT THE FEDERAL REPUBLIC OF GERMANY WOULD HAVE A FASTER GROWTH OF DEMAND FOR HONG KONG PRODUCTS THAN THE UNITED STATES AND THE UNITED KINGDOM. THESE VIEWS WERE BROADLY CONSISTENT WITH THE ANALYSIS CONTAINED IN THE BUDGET SPEECH.

FACTORIES PRODUCING WATCHES AND CLOCKS, FOOD, ELECTRICAL APPLIANCES AND ELECTRONICS WERE LIKELY TO HAVE A FASTER GROWTH IN BUSINESS THAN TEXTILES, CLOTHING AND PLASTICS FACTORIES DURING 1981.

THE PRICES OF PRODUCTS FOR EXPORT WERE EXPECTED TO RISE BY AROUND SIX PER CENT OVER THE 1980 LEVEL, SOMEWHAT LESS THAN THE ANTICIPATED INCREASES OF EIGHT PER CENT IN THE PRICES OF MATERIAL INPUTS AND 10 PER CENT IN WAGE RATES FOR OPERATIVES.

EMPLOYMENT IN THE FACTORIES SURVEYED WAS EXPECTED TO INCREASE BY TWO PER CENT IN 1981, ABOUT ONE THIRD OF THE MANUFACTURERS CONTACTED SAW LESS DIFFICULTY IN RECRUITING LABOUR DURING THE YEAR, WHILE NEARLY HALF OF THEM ENVISAGED THE SITUATION TO BE MUCH THE SAME AS IN 1980.

/IN LINE