XN000022-1983-08-22 — Page 3

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MONDAY, AUGUST 22, 1983

FIRMS IN THE 'HOTELS' BUSINESS REPORTED AN IMPROVEMENT IN BUSINESS IN THE SECOND QUARTER BUT THEY EXPECT A DECLINE IN THE THIRD QUARTER DUE TO SEASONAL FACTORS.

*BANKS' HAD RATHER UNFAVOURABLE BUSINESS PERFORMANCE IN

THE SECOND QUARTER WHICH WAS CONTRARY TO THEIR EARLIER EXPECTATION OF SOME IMPROVEMENT OVER THE FIRST QUARTER.

HOWEVER, VIEWS OF THE RESPONDENTS ARE THAT BUSINESS PROSPECTS FOR THE THIRD QUARTER ARE QUITE FAVOURABLE.

FIRMS IN THE TRANSPORTATION' BUSINESS EXPERIENCED A SUBSTANTIAL IMPROVEMENT IN THE SECOND QUARTER WHICH WAS NOT EXPECTED EARLIER. THE OUTLOOK FOR THE THIRD QUARTER IS FOR A CONTINUED IMPROVEMENT.

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THE PREDOMINANT PROBLEMS ENCOUNTERED BY THE MANUFACTURING' SECTOR IN THE SECOND QUARTER WERE UNCERTAINTIES THROUGH EXCHANGE RATE FLUCTUATIONS AND HIGH MATERIAL PRICES.

THESE WERE PINPOINTED BY A LARGE PROPORTION OF FIRMS ACROSS ALL MANUFACTURING INDUSTRIES, AND ARE EXPECTED TO CONTINUE IN THE THIRD QUARTER WITH A SIMILAR LEVEL OF INTENSITY.

THE ORDERS POSITION IN THE 'MANUFACTURING SECTOR IMPROVED SIGNIFICANTLY IN THE SECOND QUARTER WITH THE PROPORTION OF FIRMS CITING INSUFFICIENT ORDER AS A PROBLEM DRASTICALLY REDUCED.

THE SITUATION IS EXPECTED TO CONTINUE TO IMPROVE IN THE THIRD QUARTER.

AS REGARDS THE 'CONSTRUCTION INDUSTRY, APART FROM THE PERSISTING PROBLEMS OF INSUFFICIENT BUSINESS ORDERS AND STRONG PRICE COMPETITION OVER THE PAST QUARTERS, UNCERTAINTIES THROUGH EXCHANGE RATE FLUCTUATIONS, HIGH INTEREST RATES AND HIGH MATERIAL PRICES ARE EMERGING AS SIGNIFICANT PROBLEMS.

FIRMS IN THE WHOLESALE AND RETAIL TRADE BUSINESS QUOTED UNCERTAINTIES THROUGH EXCHANGE RATE FLUCTUATIONS AND PRICE COMPETITION AS LEADING PROBLEMS IN THE SECOND QUARTER WITH LITTLE PROSPECT OF THESE PROBLEMS EASING IN THE COMING QUARTER.

PRICE COMPETITION AND INSUFFICIENT BUSINESS WERE REPORTED AS MAJOR PROBLEMS BY FIRMS IN THE RESTAURANTS' AND 'HOTELS BUSINESS FOR BOTH THE SECOND AND THIRD QUARTERS: HIGH STAFF TURNOVER, ON THE OTHER HAND, IS EASING SOMEWHAT IN THE 'RESTAURANTS' SECTOR.

THE CENSUS AND STATISTICS DEPARTMENT SAID THAT THE SURVEY RESULTS OBTAINED WITH A MINIMUM TIME LAG, WERE BASICALLY INTENDED TO PROVIDE ONE SOURCE OF REFERENCE FOR MAKING A QUICK ASSESSMENT OF THE CURRENT ECONOMIC SITUATION OF HONG KONG.

PARTICIPATING FIRMS WERE ASKED TO INDICATE WHETHER IN THEIR OPINIONS, THE GENERAL BUSINESS SITUATION AND LEVEL OF CAPACITY UTILISATION HAD IMPROVED', 'REMAINED THE SAME OR "DETERIORATED IN THE IMMEDIATELY PAST QUARTER AS COMPARED WITH THE QUARTER BEFORE.

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