TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 331

to

unemployment tend to lag behind changes in the economy, rising unemployment rate (paragraph 4.1) does not

not necessarily mean

that the underlying economic situation is continuing

deteriorate. Given the indications of some revival in

manufacturing activity in the first quarter (paragraphs 5.1,

5.3 and 5.4), the underlying economic situation is already improving.

1.5

Employment in manufacturing and in building and

construction declined during 1982. Employment in the tertiary

services sectors, however, recorded increases (paragraphs 4.5

to 4.8). In the twelve months to December 1982, manufacturing

and construction wage rates declined in real terms. However, salaries in the tertiary services sectors, in terms of payroll

per person engaged, rose in real terms (paragraphs 4.10 to

4.12).

1.6

In the property sector, at the end of 1982 the

vacancy position for most types of property, apart from

residential, was high in relation to existing stock

(paragraphs 5.6 and 5.7). Prices and rentals of finished

property either declined further or stabilized in the first

quarter (paragraph 5.6). There are signs of some renewed interest in the buying of property,

of property, particularly of small

residential flats.

Inflation and the monetary aggregates

1.7

As aggregate demand in the economy was not imposing

much pressure on aggregate supply and hence on the general price level,

level, the rate

rate of inflation in the first quarter of

1983 remained

remained roughly

roughly the same as in the fourth quarter of

1982. The easing of inflation elsewhere in the world was

another contributory factor. But the weakness of the Hong

Kong dollar (paragraphs 3.10 and 3.11) had an unfavourable

influence.

2

/1.8 Monetary