XN000022-1983-05-24 — Page 3

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TUESDAY, MAY 24, 1983

APART FROM GIVING AN OVERALL VIEW, THE REPORT 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 POINTS OUT THAT DOMESTIC EXPORTS IN THE FIRST QUARTER SHOWED A YEAR-ON-YEAR GROWTH RATE OF SIX PER CENT IN VALUE TERMS OR TWO PER CENT IN REAL TERMS.

THE LATTER GROWTH RATE, ALBEIT SLOW, WAS ENCOURAGING GIVEN THAT THE YEAR-ON-YEAR GROWTH RATE OF DOMESTIC EXPORTS WAS NEGATIVE FOR FOUR CONSECUTIVE QUARTERS IN 1982.

WITHIN THIS INCREASE IN THE OVERALL GROWTH RATE OF EXPORTS WAS A SIGNIFICANT IMPROVEMENT IN DOMESTIC EXPORTS TO THE UNITED STATES, HONG KONG'S LARGEST MARKET, BY 19 PER CENT IN VALUE TERMS OR NINE PER CENT IN REAL TERMS.

THE REPORT CAUTIONS, HOWEVER, THAT THE IMPROVEMENT IN DOMESTIC EXPORT PERFORMANCE IN THE FIRST QUARTER, THOUGH PROMISING, DID NOT IN ITSELF PROVIDE SUFFICIENT ÉVIDENCE THAT A SUSTAINED ECONOMIC RECOVERY HAS BEGUN.

IT POINTS OUT THAT, FIRST, MANUFACTURING EMPLOYMENT CONTINUED TO DECLINE IN THE FIRST QUARTER OF 1983 AND THERE ARE AS YET NO CLEAR SIGNS OF A SUBSTANTIAL IMPROVEMENT, EXCEPT PERHAPS IN SOME SECTORS OF MANUFACTURING.

SECOND, RETAINED IMPORTS OF RAW MATERIALS AND SEMI- MANUFACTURES SHOWED NO GROWTH IN REAL TERMS IN THE FIRST QUARTER, ALTHOUGH THERE ARE INDICATIONS THAT THEY HAVE BEGUN TO PICK UP SINCE THEN.

THIRD, APART FROM THE MORE DEFINITE SIGNS OF AN ECONOMIC RECOVERY IN THE UNITED STATES AND THE FEDERAL REPUBLIC OF GERMANY, MOST INDICATORS POINT TO ONLY A MODEST RECOVERY IN MOST OF HONG KONG'S MAJOR MARKETS.

NEVERTHELESS, THE SPOKESMAN POINTED OUT THAT STATISTICS AVAILABLE SINCE THE REPORT WAS WRITTEN CONTINUED TO INDICATE THAT AN ECONOMIC RECOVERY WAS UNDERWAY.

THE REPORT FURTHER NOTES THAT RE-EXPORTS ALSO IMPROVED IN THE FIRST QUARTER, SHOWING A YEAR-ON-YEAR GROWTH RATE OF FIVE PER CENT IN VALUE TERMS OR THREE PER CENT IN REAL TERMS.

THE YEAR-ON-YEAR GROWTH RATE OF THE VALUE OF TOTAL EXPORTS (DOMESTIC EXPORTS PLUS RE-EXPORTS), AT SIX PER CENT IN THE FIRST QUARTER, WAS THUS FASTER THAN THAT OF IMPORTS AT TWO PER CENT.

IN CONSEQUENCE, THE VISIBLE TRADE GAP NARROWED SIGNIFICANTLY TO 13 PER CENT FROM 16 PER CENT IN THE FIRST QUARTER OF 1982.

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