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The
have paused in the fourth quarter of 1987.
growth rate in real terms for 1987 as a whole was
about 18%, while in 1986 it was 26% (Table 2).
8.
The substantial growth in these retained imports in the first three quarters of 1987 was in line with the strong performance in domestic
exports. In addition, relatively low interest
rates and the tight conditions in the labour market
have tended to induce manufacturers to substitute
capital equipment for labour through mechanization
and automation. Because of the lead time involved
in the ordering and delivery of capital goods, the slow-down in the growth rate of retained imports of industrial machinery in the fourth quarter was probably not related to the worldwide stock market
crash in October. However, given the less optimistic outlook for Hong Kong's exports to
overseas markets, the investment intentions of
local manufacturers could continue to weaken.
is therefore likely that the growth rate of this
category of investment will slow down even further
during 1988.
It
9.
(d)
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
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 12% in
real terms in the fourth quarter of 1987, following increases of about 17%, 37% and 56% respectively in
CONFIDENTIAL #
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