XN000022-1983-05-24 — Page 4

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TUESDAY, MAY 24, 1983

ON THE FINANCIAL SECTOR, THE REPORT OBSERVES THE FOLLOWING POINTS:

FIRST, THE OVERALL GROWTH RATE OF THE MONEY SUPPLY WAS MODERATE DURING THE FIRST QUARTER, BUT THAT OF THE FOREIGN CURRENCY COMPONENT WAS RELATIVELY HIGH, THE INTEREST TAX CHANGES INTRODUCED IN FEBRUARY 1982, AMONG OTHER FACTORS, STILL APPEARED TO BE HAVING SOME EFFECT.

SECOND, INTEREST RATES REMAINED GENERALLY STABLE THROUGHOUT THE FIRST QUARTER, WHILE LOANS AND ADVANCES GREW ONLY SLOWLY.

THIRD, THE TRADE WEIGHTED EXCHANGE RATE INDEX FOR THE HONG KONG DOLLAR WAS RELATIVELY STABLE AFTER THE SHARP ADJUSTMENT

IN THE PREVIOUS QUARTER,

HOWEVER, RENEWED DOWNWARD PRESSURE ON THE HONG KONG DOLLAR DEVELOPED IN THE SECOND QUARTER.

THE EXCHANGE VALUE OF THE HONG KONG DOLLAR, PARTICULARLY AGAINST THE US DOLLAR, WEAKENED FURTHER IN THE EARLY PART OF THE SECOND QUARTER.

ON THE LABOUR SECTOR, THE REPORT INDICATES THAT MANUFACTURING EMPLOYMENT DECREASED IN 1982, REFLECTING THE INFLUENCE OF THE GENERAL ECONOMIC SLOWDOWN.

EMPLOYMENT ON BUILDING AND CONSTRUCTION SITES ALSO DECLINED.

THESE DECREASES WERE, HOWEVER, LARGELY OFFSET BY THE INCREASE IN EMPLOYMENT IN THE TERTIARY SERVICES SECTORS.

THE TREND OF THE RELATIVE SHIFT IN THE DISTRIBUTION OF EMPLOYMENT IN FAVOUR OF THE TERTIARY SERVICES SECTORS THUS CONTINUED.

THE REPORT FURTHER OBSERVES THAT WHILE MANUFACTURING WAGE RATES AND CONSTRUCTION WAGE RATES DECLINED IN REAL TERMS SALARIES IN THE TERTIARY SERVICES SECTORS, IN TERMS OF PAYROLL PER PERSON ENGAGED, CONTINUED TO RISE.

ACCORDING TO THE REPORT, THERE WAS SOME IMPROVEMENT IN MANUFACTURING ACTIVITY IN THE FIRST QUARTER, AS SUGGESTED BY THE LATEST STATISTICS ON DOMESTIC EXPORTS AND ON RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES.

THE MONTHLY SURVEY ON EMPLOYMENT, PAYROLL AND ORDERS-ON-HAND SHOWED GRADUAL IMPROVEMENTS IN THE ORDER-BOOK POSITIONS IN RECENT MONTHS.

FURTHER, SOME QUALITATIVE ASSESSMENTS, BASED ON FACTORY VISITS, CONTACTS WITH LOCAL INDUSTRIALISTS AND ADMINISTRATIVE RECORDS ALSO INDICATED THAT MANUFACTURERS IN GENERAL WERE MORE OPTIMISTIC ABOUT EXPORT PROSPECTS IN THE FIRST QUARTER OF THIS YEAR THAN IN THE FOURTH QUARTER OF 1982.

THE GENERAL