ENG-1990 — Page 85

THE ECONOMY

16 per cent in the second half. Retained imports of foodstuffs, fuels, capital goods, and raw materials and semi-manufactures grew by about nine per cent, two per cent, five per cent and 13 per cent respectively in real terms in 1990 over 1989. Increases in the latter two categories were concentrated in the second half of the year. Reflecting slack consumer spending, retained imports of consumer goods fell by about six per cent in real terms. There was, however, a revival in these retained imports in the fourth quarter, indicating that the setback in consumer spending has largely bottomed out.

As the value of total exports (domestic exports plus re-exports) was smaller than that of imports, a visible trade deficit of $2,656 million, equivalent to 0.4 per cent of the total value of imports, was recorded in 1990. If an estimate of the imports of gold for industrial and commercial use was included, the deficit would have been $5,326 million. This compared with a surplus of $7,728 million (or $5,221 million after a similar adjustment for gold imports) recorded in 1989. As the prices of imports increased at a slower rate than those of total exports in 1990, there was a small improvement in the terms of trade.

Domestic Demand

Domestic demand grew by six per cent in real terms in 1990, following virtually zero growth in 1989. The growth rate in real terms of private consumption expenditure was four per cent in 1990, having increased by three per cent in 1989. Government consumption expenditure showed a higher growth rate, by eight per cent in real terms in 1990. The corresponding growth rate in 1989 was six per cent. Investment demand, measured in terms of gross domestic fixed capital formation, grew by six per cent in real terms in 1990, having increased by one per cent in 1989. Among its main components, expenditure on building and construction rose by eight per cent in real terms in 1990, while expenditure on plant and machinery was four per cent higher.

The Labour Market

The labour market remained generally tight, although the demand for labour in some sectors, like manufacturing and construction, was less intense in 1990 than in 1989. The unemployment and underemployment rates were still low by historical standards, although they were, on average, marginally higher in 1990 than in 1989. However, there was some tightening in the labour market situation in the fourth quarter. The seasonally adjusted unemployment rate was 1.4 per cent and the underemployment rate was 0.8 per cent. They were, respectively, 0.3 and 0.2 of a percentage point lower than in the preceding quarter.

Between September 1989 and September 1990, manufacturing employment decreased by nine per cent to 730 200, while employment in the service sectors as a whole increased by eight per cent to 2.7 million. Labour resources thus continued to shift from manufacturing to services. Among the service sectors, employment in finance, insurance, real estate and business services increased by ten per cent; in the wholesale, retail and import/export trades by eight per cent; in restaurants and hotels by six per cent; and in water transport, air transport and services allied to transport by six per cent in September 1990 over a year earlier. Employment on building and construction (including civil engineering) sites increased by five per cent. For the building and construction industry as a whole, employment (covering both site workers and non-site workers) showed little change. In line with the weak performance of domestic exports, vacancies in manufacturing decreased by 18 per cent from September 1989 to 36 200 in September 1990. Vacancies in the service sectors as a whole also declined by five per cent to 51 200.

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