XN000022-1996-05-31 — Page 10

Pag kan m

8

Along with the pick-up in the residential property market, there was some revival in private sector building activity. Output from the public housing programme also increased.

Meanwhile, in line with the steady rise in building and construction activity and the on-going process of automation and mechanisation, there should have been a further rise in expenditure on machinery and equipment.

Labour market conditions continued to stabilise in recent months. The total labour force and total employment both showed accelerated growth, at 5.5% and 5.1% respectively, in the first quarter of 1996 over a year earlier. But as labour supply continued to outstrip demand, the unemployment rate stayed at a relatively high level.

Nevertheless, both the seasonally adjusted unemployment rate and the underemployment rate had edged lower, to 3.2% and 2% respectively in the first quarter of 1996, from 3.5% and 2.3% in the preceding quarter. Manpower utilisation was intensive in most of the service sectors.

Services and construction continued to provide the bulk of additional employment in recent months.

Analysed by major service sector, employment in water transport, air transport and related services had the fastest increase in December 1995 over a year earlier, followed by the wholesale and import/export trades, finance and business services, and community, social and personal services.

On the other hand, employment in the manufacturing sector, the retail trade, and restaurants and hotels remained on a downtrend. In the construction sector, employment at sites had been on a sustained strong increase since the latter part of 1994.

Amidst a more abundant labour supply, relatively fewer vacancies were recorded in overall terms, although in certain more skilled job categories some shortages were still apparent.

Earnings in the manufacturing and construction sectors and in most of the major service sectors surveyed showed continued increases both in money terms and in real terms in the fourth quarter of 1995 over a year earlier.

This generally corresponded to a higher work intensity among those in employment.

Sentiment in the residential property market showed a notable improvement in the first quarter of 1996. The cumulative large decline in flat prices for one and a half years, the cuts in interest rate, and the offer of more attractive mortgage terms by the banks all helped flat buyers' affordability.

Page 10Page 11