ENG-2000 — Page 98

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Chart 17

1

Index (1999-100)

250

200

150

THE ECONOMY

Property prices and rentals (conventional flatted factory space)

Price index

Rental index

100

50

0

1996

1997

QI Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1995

1998 I 1999

2000

Both the prices and rentals for industrial property continued to trend downward in 2000.

Consumer Prices

Consumer prices fell for the second consecutive year in 2000. Yet the downtrend had been gradually levelling off over the course of the year, under the combined influence of several domestic and external factors. Domestically, while price discounts and other inducements were still prevalent at the various retail outlets, the discounts offered on some of the goods and services had narrowed in the latter part of the year, following the distinct revival in consumer spending in the earlier months. Also, there were upward adjustments in a few public utility charges. As to the main cost components, wages had reverted to a modest rise, while rentals showed sign of bottoming out in the more recent months. Externally, there was a sustained, yet mild, increase in the prices of retained imports in overall terms. The further easing in the prices of retained imports of foodstuffs and consumer goods was more than offset by a pick-up in the prices of retained imports of other end-use categories, particularly the price surge for fuels.

On a year-on-year comparison, the decrease in the Composite Consumer Price Index narrowed appreciably during the course of 2000, from 5.1 per cent in the first quarter to 4.5 per cent in the second quarter, and then more visibly to 2.8 per cent in the third quarter, and further to 2.2 per cent in the fourth quarter. The moderation in price declines occurred across many of the commodity items, more distinctly for clothing and footwear, durable goods, basic foodstuffs and meals at restaurants. For 2000 as a whole, the Composite CPI went down by 3.7 per cent, smaller than the 4.0 per cent fall in 1999.

The three sub-indices, namely the CPI(A), CPI(B) and CPI(C), exhibited a broadly similar profile of movement. Their respective year-on-year decreases moderated from