XN000022-1997-02-17 — Page 2

1.

Business Prospects for 1997

Manufacturers generally expect a slight increase in volume of orders in 1997 over 1996, according to the results of a recent Half-yearly Business Prospects Survey released today (Monday) by the Census and Statistics Department.

Analysed by manufacturing industry, manufacturers in the electronic and electrical products, the electrical machinery and the printing industries generally expect a mild increase in volume of orders, while manufacturers in the wearing apparel and the fabricated metal products industries anticipate a fairly stable volume of orders.

On the other hand, manufacturers in the textiles industry expect a mild decrease in the volume of orders.

In general, manufacturers expect capacity utilisation to remain stable in 1997 compared with 1996. Profit margins, however, are foreseen to be lower in 1997 compared with 1996.

Exporters anticipate a moderate increase in both the values of domestic exports and re-exports in 1997 compared with last year. Similar views are held by bankers, who expect that the value of total exports will increase moderately.

Looking ahead, construction firms generally expect a moderate increase in the volume of construction output in 1997 compared with 1996.

The survey is held on a half-yearly basis, covering about 300 firms from major manufacturing industries, the import/export trades, the banking industry and the construction sector. It collects views of firms on the short-term prospects of the various major business sectors covered and aims at providing a quick reference, with a minimum time lag, for assessing the short-term future economic performance of Hong Kong.

A spokesman of the department cautioned that, in a survey of this nature, the results should be interpreted with care as it is difficult to establish precisely the extent to which respondents' perception of the future accords with the underlying trends.