TNAG-2977-FCO40-1469-Economic-policy-in-Hong-Kong-1982 — Page 215

declined

output per head in civil engineering has not significantly in the past few years. In view of the strong demand caused by such large civil engineering projects as the

MTR Island Line, employment and output in the civil

engineering industry are likely to have increased in the first

quarter of 1982.

5.10

accelerated in the

After increasing only moderately throughout most of

1981, the rate of increase in building and construction

(7) costs

first quarter. By February

1982, the Labour and Materials Cost Index prepared by the Architectural Office of the Public Works Department was 13%

higher than in February 1981. The corresponding increase for

October 1981 over October 1980 was only 9%. However, the Tender Price Index for public building projects, also prepared by the Architectural Office, was 1% lower in the fourth

quarter of 1981 than in the fourth quarter of 1980. This apparent inconsistency may be explained partly by lower profit

margins for the building contractors and partly by the existence of escalation clauses in public works contracts.

Land

5.11

In the first quarter of 1982, the Government sold, at Crown Land auctions and by tender (including Letters A/B

tenders), a total of 246

246 thousand square metres of land, 38 thousand square metres

square metres for industrial and 208 thousand square

/ metres

(7)

It is not considered appropriate to use the Labour and Materials Cost Index and the Tender Price Index, both of which are prepared by the Architectural Office and refer to building projects exclusively, as reliable indicators of building and construction costs in general. Hence work is being undertaken to construct a separate price/cost index for highways and, if possible, to construct indexes for other civil engineering projects.

34