XN000022-1987-02-16 — Page 4

MONDAY, FEBRUARY 16, 1987

3-

REGARDING BUSINESS OUTLOOK FOR THE FIRST QUARTER OF 1987, FIRMS IN THE FABRICATED METAL PRODUCTS AND WATCHES AND CLOCKS INDUSTRIES ON THE WHOLE EXPECT THE BUSINESS SITUATION TO REMAIN STABLE WHILE FIRMS IN THE PRINTING AND ELECTRONICS INDUSTRIES EXPRESS OPTIMISM ABOUT THE BUSINESS OUTLOOK. IN CONTRAST, FIRMS IN OTHER INDUSTRIES EXPECT SOME DECLINE IN BUSINESS IN THE FIRST QUARTER OF 1987.

THE MAJORITY OF FIRMS IN THE WHOLESALE, RETAIL AND IMPORT- EXPORT TRADES, RESTAURANTS AND HOTELS BUSINESSES REPORTED THAT THE GENERAL BUSINESS SITUATION IN THE FOURTH QUARTER HAD IMPROVED.

AS REGARDS EXPECTATION OF THE GENERAL BUSINESS SITUATION, VIEWS OF FIRMS IN THE WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES AND RESTAURANT BUSINESSES ARE DIVIDED. THE OVERWHELMING MAJORITY OF HOTELS, HOWEVER, EXPECT THE GENERAL BUSINESS SITUATION IN THE FIRST QUARTER OF 1987 TO DETERIORATE, DUE MAINLY TO SEASONAL FACTORS.

THE SURVEY ALSO COVERED BUSINESS PROBLEMS FACED BY FIRMS.

FOR THE MANUFACTURING SECTOR AS A WHOLE, FIRMS CONTINUED TO BE AFFECTED BY FOUR MAJOR BUSINESS PROBLEMS IN THE FOURTH QUARTER. THEY WERE SHORTAGE OF SKILLED LABOUR, HIGH MATERIAL PRICES, PRICE COMPETITION FROM FIRMS IN HONG KONG AND PRICE COMPETITION FROM FIRMS OVERSEAS. THESE PROBLEMS ARE EXPECTED TO REMAIN PROMINENT IN THE FIRST QUARTER OF 1987.

AS FOR THE CONSTRUCTION SECTOR, A HIGH PERCENTAGE OF FIRMS REPORTED THE PROBLEMS OF PRICE COMPETITION FROM LOCAL AND FOREIGN FIRMS IN HONG KONG AS MAJOR PROBLEMS FOR BOTH THE FOURTH QUARTER OF 1986 AND THE FIRST QUARTER OF 1987. ADDITIONALLY, THE INTENSITY OF THE PROBLEMS OF SHORTAGE OF SKILLED LABOUR, HIGH WAGE RATES AND HIGH MATERIAL PRICES AMONG CONSTRUCTION FIRMS HAVE BEEN INCREASING.

AS REGARDS THE WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES RESTAURANTS AND HOTELS BUSINESSES, PRICE COMPETITION REMAINED THE MOST PREVAILING PROBLEMS ENCOUNTERED BY FIRMS IN THE FOURTH QUARTER OF 1986.

OTHER RELATIVELY MORE SIGNIFICANT PROBLEMS CITED BY FIRMS IN THE WHOLESALE, RETAIL AND IMPORT-EXPORT TRADES AND RESTAURANTS BUSINESSES WERE UNCERTAINTIES THROUGH EXCHANGE RATES FLUCTUATIONS AND HIGH STAFF TURNOVER RESPECTIVELY. THESE PROBLEMS ARE EXPECTED TO REMAIN EXTENSIVE IN THE FIRST QUARTER OF 1987.

+

IN THE CASE OF THE OTHER SERVICES SECTOR, PRICE COMPETITION WAS CONSIDERED A COMMON PROBLEM FACED BY FIRMS IN THE TRANSPORT STORAGE AND COMMUNICATION AND BANKS BUSINESSES.

/ACCORDING TO