ENG-1998 — Page 89

THE ECONOMY

sites fell by 3 per cent. The substantial decline in employment at civil engineering sites following completion of the Airport Core Programme was not fully offset by the increase in employment at building sites along with continued work under the Public Housing Programme.

Chart 10

Employment by broad economic sector

Number ('000)

Number ('000)

2500

100

2000

Service sectors as a whole (left scale)

1500

Building and construction sites (right scale)

1000

500

0

Manufacturing sector (left scale)

Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep

1993

1996 I 1997

1998

1994

1995

The structural shift in employment from manufacturing to services continued in 1998.

90

80

70

680

50

40

The loosening in manpower resource balance also led to a moderation in earnings and wages. Overall earnings rose by 3 per cent in money terms in the third quarter of 1998 over a year earlier. Overall wages had a broadly similar rise, by 2 per cent in money terms in September 1998 over a year earlier. Both were distinctly slower than the increases of 11 per cent and 7 per cent in the third quarter of 1997. Moreover, they reflected largely the pay rises in the early part of 1998, when many companies still granted annual pay increase. Since then, earnings and wages were contained by continued slackening in the labour market.

The Property Market

The residential property market underwent a severe downturn during the first 10 months of 1998, overshadowed by rising unemployment, moderated income, higher mortgage rate, and generally cautious mortgage lending by the banks. The substantial price cuts and intensive marketing strategy adopted by developers in the primary market induced considerable downward pressure in the secondary market. As prices dipped, cases of forfeiture of deposit and resale at a loss were widely reported. Yet market sentiment improved noticeably since October, upon stabilisation in the regional and local financial markets and successive cuts in local interest rates.

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