CONFIDENTIAL #
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7.
(c) Retained imports of industrial
machinery for use in the manufacturing sector
Notwithstanding the relatively high base
of comparison in the third quarter last year, retained imports of industrial machinery for use in the manufacturing sector increased by about 30% in real terms in the third quarter of 1987, compared with increases of 22% and 18% respectively in the first and second quarters. The corresponding growth rate for 1986 as a whole was 26% (Table 2). Thus, the trend of strong growth in this category of investment, which started in the second quarter of 1986, continued into the third quarter of 1987.
8.
This substantial growth was in line with
In
the strong performance in domestic exports. addition, relatively low interest rates and the tight conditions in the labour market have tended to encourage manufacturers to substitute capital equipment for labour through mechanization and automation. However, the recent collapse in world stock prices has given rise to a less optimistic business outlook in the major overseas markets, which in turn could weaken the investment intentions of local manufacturers. It is therefore likely that industrial investment will begin to
grow more slowly in the near future.
9.
(a)
Retained imports of capital goods other than for manufacturing use
In view of the heterogeneous nature of retained imports of capital goods other than for
"ANEIRENT
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