XN000022-1986-08-19 — Page 4

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TUESDAY, AUGUST 19, 1986

REING THE BUSINESS OUTLOOK FOR THE THIRD QUARTER, RESPONDING FIRMS ACHJUS ALL MANUFACTURING INDUSTRIES DISPLAY GENERAL OPTIMISM.

FIRMS IN THE +WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES+ REPORTET A STABLE LEVEL OF BUSINESS IN THE SECOND QUARTER. RESTALATS EXPERIENCED A DETERIORATION IN BUSINESS WHILE MOST HOTELS EXPERIENCED IMPROVEMENTS IN THE SECOND QUARTER, MAINLY DUE TO SEASONAL FACTORS.

FIRMS IN THE +WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES+ AND RESTAURANTS BUSINESSES EXPECT A BETTER BUSINESS SITUATION IN THE THIRD QUARTER COMPARED TO THE SECOND QUARTER, WHILE FIRMS IN THE HOTELS TRADE GENERALLY EXPECT SOME DETERIORATION IN BUSINESS.

THE SURVEY ALSO COVERED BUSINESS PROBLEMS FACED BY FIRMS.

FOR THE SECOND QUARTER, OVER ONE-THIRD OF THE RESPONDENTS IN THE MANUFACTURING SECTOR INDICATED HIGH MATERIAL PRICES, PRICE COMPETITION BOTH FROM FIRMS IN HONG KONG AND FROM FIRMS OVERSEAS AS SIGNIFICANT PROBLEMS. ON THE OTHER HAND, THE PROBLEM OF INSUFFICIENT BUSINESS ORDERS HAD EASED OFF TO SOME EXTENT IN THE SECOND QUARTER.

FOR THE CONSTRUCTION SECTOR, THE PROBLEMS OF INSUFFICIENT BUSINESS CONTRACTS, HIGH MATERIAL PRICES AND PRICE COMPETITION BOTH FROM FIRMS IN HONG KONG AND FROM FIRMS OVERSEAS CONTINUED TO BE REGARDED AS MAJOR PROBLEMS BOTH FOR THE SECOND AND THIRD QUARTERS. IN ADDITION, THERE WAS AN INCREASE IN THE PROPORTION OF CONSTRUCTION FIRMS INDICATING EXCHANGE RATE FLUCTUATIONS AS A SIGNIFICANT PROBLEM.

AS FOR THE +WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES+ BUSINESS, FIRMS CONSIDERED INSUFFICIENT BUSINESS, PRICE COMPETITION AND EXCHANGE RATE FLUCTUATIONS AS SIGNIFICANT PROBLEMS BOTH IN THE SECOND AND THIRD QUARTERS.

THE MAJOR PROBLEMS ENCOUNTERED BY RESTAURANTS AND HOTELS WERE INSUFFICIENT BUSINESS, PRICE COMPETITION, HIGH STAFF COST AND HIGH STAFF TURNOVER IN THE SECOND QUARTER. THE PROBLEMS ARE EXPECTED TO PERSIST IN THE THIRD QUARTER.

ALL TRADES ACROSS THE +OTHER SERVICES+ SECTOR CONSIDERED PRICE COMPETITION AS A PREDOMINANT PROBLEM IN THE SECOND AND THIRD QUARTERS. THE PROBLEM OF HIGH STAFF TURNOVER WAS ENCOUNTERED BY BANKS AND FIRMS IN THE +REAL ESTATE DEVELOPMENT AND RELATED SERVICES+ BUSINESS. MOREOVER, THE LATTER FIRMS FACED THE ADDITIONAL PROBLEM OF HIGH STAFF COSTS IN THE SECOND QUARTER,

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NEVERTHELESS, THE INTENSITY OF THE PROBLEM OF INSUFFICIENT BUSINESS SEEMS TO HAVE EASED OFF FOR BANKS AND FIRMS IN THE +TRANSPORT, STORAGE AND COMMUNICATION+ BUSINESS.

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.

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