TNAG-1640-FCO40-2287-Economic-situation-in-Hong-Kong-1987 — Page 9

CONFIDENTIAL #

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manufacturing use, the changes in real terms shown

in the relevant data are not sufficiently reliable

to be quoted publicly. The series is included merely to provide a rough indication of the overall trend. These retained imports grew by about 56% in real terms in the third quarter of 1987, following increases of 17% and 37% respectively in the first and second quarters. The corresponding growth rate in the fourth quarter of 1986 was 28%. In

contrast, there was a decline in investment in the

first half of 1986, and only a small increase in

the third quarter (Table 2). The substantial

growth in this category of investment has now been

maintained for four consecutive quarters.

10.

•

Within this category, investment in virtually all items grew strongly in money terms in

the third quarter of 1987. The fastest increases

were recorded for transport equipment, air conditioners and air conditioning machines, office

machinery, and electrical line telephone

apparatus. On the other hand, a rather smaller

increase was recorded for construction machinery

(Table 4).

•

Investment in property

(all growth rates quoted in this section are on

year-on-year basis)

11.

(a) General situation

Supported by favourable economic

conditions and a relatively low mortgage rate, the

property market remained active during the third

quarter of 1987. The demand for industrial

property continued to be firm, given the robust