XN000022-1992-08-28 — Page 4

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FRIDAY, AUGUST 28, 1992

CONSUMER DEMAND REMAINED STRONG IN THE SECOND QUARTER. RETAINED IMPORTS OF CONSUMER GOODS GREW BY ABOUT 9% IN THE SECOND QUARTER OF 1992 OVER A YEAR EARLIER, HAVING SURGED BY 28% IN THE FIRST QUARTER.

CONCURRENTLY, THE VOLUME OF RETAIL SALES ALSO SHOWED A MARKED INCREASE. BY 13% IN THE FIRST FIVE MONTHS OF 1992 OVER THE SAME PERIOD IN 1991. THESE INCREASES WERE SUPPORTED BY THE SPENDING OF BOTH LOCAL CONSUMERS AND TOURISTS.

INVESTMENT DEMAND WAS ALSO STRONG. RETAINED IMPORTS OF CAPITAL GOODS GREW BY ABOUT 25% IN THE SECOND QUARTER OF 1992 OVER A YEAR EARLIER, HAVING INCREASED BY 12% IN THE FIRST QUARTER. WITHIN THIS CATEGORY, THERE WAS A SHARP RISE IN RETAINED IMPORTS OF INDUSTRIAL MACHINERY FOR MANUFACTURING USE.

CONSUMER PRICE INFLATION CONTINUED TO MODERATE DURING THE FIRST HALF OF THIS YEAR. THE YEAR-ON-YEAR RATE OF INCREASE IN THE CONSUMER PRICE INDEX (A) SLOWED DOWN FROM 12.3% AND 10.9% RESPECTIVELY IN THE THIRD AND FOURTH QUARTERS OF 1991 TO 10.1% IN THE FIRST QUARTER AND 9.0% IN THE SECOND QUARTER OF 1992 (THE INCREASE WAS 8.8% IN JULY).

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THIS REPRESENTED A SIGNIFICANT

DECELERATION

FROM THE PEAK

FIGURE OF 13.9% IN APRIL LAST YEAR.

THE AVERAGE INCREASE FOR THE FIRST HALF OF 1992 AS A WHOLE WAS 9.6%. THE CORRESPONDING INCREASES IN THE CPI (B) AND HANG SENG CPI WERE 9.6% AND 9.8%, WHILE THE COMPOSITE CPI WAS 9.7% HIGHER.

FOLLOWING A TEMPORARY EASING IN THE EARLY PART OF 1992, LABOUR MARKET CONDITIONS SEEMED TO HAVE TIGHTENED UP AGAIN IN THE MORE RECENT MONTHS. THE SEASONALLY ADJUSTED UNEMPLOYMENT RATE IN THE SECOND QUARTER, AT 2.3%, WAS 0.1 OF A PERCENTAGE POINT LOWER THAN IN BOTH THE PRECEDING QUARTER AND THE SAME QUARTER LAST YEAR ( THE PROVISIONAL ESTIMATE FOR THE THREE MONTHS ENDING JULY WAS 2.1%).

QUARTER, WAS

THE UNDEREMPLOYMENT RATE, AT 2.2% IN THE SECOND THE SAME AS IN THE PRECEDING QUARTER, THOUGH 0.5 OF A PERCENTAGE POINT HIGHER THAN A YEAR EARLIER.

VACANCIES IN ALL SECTORS COMBINED IN THE FIRST QUARTER WERE MORE THAN IN THE PRECEDING QUARTER, AND IN A NUMBER OF SECTORS VACANCIES SHOWED MARKED INCREASES.

THE PERFORMANCE OF THE PROPERTY MARKET VARIED AMONGST SUB- SECTORS. IN THE RESIDENTIAL PROPERTY MARKET, PRICES CONTINUED TO RISE MOSTLY DURING THE FIRST QUARTER WHILE RENTALS ALSO ROSE, ALBEIT MORE SLOWLY.

THE ANTI-SPECULATION MEASURES INTRODUCED BY THE GOVERNMENT SINCE LATE 1991 AND THE TIGHTER MORTGAGE LENDING POLICY PURSUED BY THE BANKS HAD PRODUCED SOME NOTICEABLE EFFECTS. AS THE MARKET ADJUSTED ITSELF, THE VOLUME OF TRANSACTIONS IN THE FIRST HALF OF THIS YEAR WAS SMALLER THAN IN THE SECOND HALF OF LAST YEAR, AND PRICES HAD TENDED TO STABILISE IN RECENT MONTHS.

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