ENG-2000 — Page 74

CHAPTER 4

The Economy

42

THE Hong Kong economy revived further in 2000, with a strong and broad-based upturn on both the external and domestic fronts. Externally, total exports of goods accelerated in growth to well in the double-digit range. Apart from buoyant import absorption in all the major markets, improved price competitiveness and productivity upgrading over the past year or so also rendered a boost. Yet there was some easing towards the year-end, as global demand slackened noticeably. Exports of services likewise picked up markedly, with impetus from inbound tourism, offshore trading and the various trade-related services. The highly robust performance of exports during the year, even when set against the concurrent surge in imports, helped sustain a sizeable surplus for the combined visible and invisible trade account.

In the domestic sector, consumer spending grew further in 2000, along with improved employment and income conditions. Yet there was again some easing towards the year-end, amidst the weakness in the major asset markets. Overall investment spending, having resumed positive growth at the beginning of the year, went up further in the ensuing months in line with a better business outlook. This was spurred predominantly by the substantial intake of machinery and equipment. On the other hand, building and construction output remained slack in the year, albeit with a relative improvement towards the year-end.

The Gross Domestic Product (GDP) attained double-digit growth, at 10.5 per cent in real terms in 2000. This was much faster than the 3.1 per cent growth in 1999, and was the highest growth recorded since 1987. On a year-on-year comparison, GDP surged by 14.1 per cent in real terms in the first quarter of 2000. Growth remained robust in the second and third quarters, both at 10.8 per cent. Yet upon a distinctly higher base, GDP settled to a 6.8 per cent growth in the fourth quarter. On a seasonally adjusted quarter-to-quarter comparison, GDP likewise leaped in the first quarter of 2000, by 5.1 per cent in real terms. GDP eased back to a 0.7 per cent decline in the second quarter, picked up again to a 2.1 per cent increase in the third quarter, and then fell slightly by 0.1 per cent in the fourth quarter.

The labour market improved progressively during 2000. The seasonally adjusted unemployment rate fell visibly, from 5.6 per cent in the first quarter of 2000 to 4.4 per cent in the fourth quarter. Concurrently, the underemployment rate edged down from 2.8 per cent to 2.7 per cent. There was a marked growth in employment, together with a surge in job vacancies, across all the major service sectors. Nominal wages and earnings, which had been virtually flat in 1999 and the first quarter of 2000, registered modest increases in both the second and third quarters.