TNAG-1483-FCO40-2037-Economic-situation-in-Hong-Kong-1986 — Page 235

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become more confident and more optimistic about business prospects in the second half of the year, with steady growth envisaged. Third, in the

the second quarter, some manufacturers

of electronics, watches and clocks, and metal products, expressed concern over the adverse effect on their production costs of the appreciation of the Yen against the Hong Kong dollar, as a large part of their material inputs were imported from Japan.

5.4

Changes in labour productivity (defined as output

per employee) in the manufacturing sector can be measured in

terms of changes in the ratio of

of the industrial production index to the corresponding employment index. On this basis,

labour productivity in manufacturing increased by 10% in the

first quarter of 1986 over the same quarter last year.

Overtime work was the main factor behind this significant

increase.

Property

5.5

The private residential property market appeared to have entered a period of consolidation in the first half of

1986, with prices and rentals for most classes of residential

property remaining steady. Demand for office space continued to be strong and, given the low level of completions, the vacancy rate is expected to decline further this year. Demand

for industrial accommodation also remained firm in the first

half.

5.6

In the first half of 1986, the supply of new private.

sector property, in terms of total usable floor area

completed, was 1.2 million square metres. This represents a

decrease of 22% over the first half of 1985. Completions in

respect of all major categories of private property decreased.

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/Usable