ENG-2001 — Page 96

THE ECONOMY

by the expansion in education and welfare services. Employment in the retail trade, in restaurants and hotels, and in water transport, air transport and services allied to transport had modest increases, by 1 to 2 per cent. Employment in financing, insurance, real estate and business services was virtually unchanged.

The local manufacturing sector faced a further marked reduction in employment, by 9 per cent in September 2001 over a year earlier. This was even larger than the fall of 7 per cent and 8 per cent respectively in March and June. The setback in domestic exports and ongoing relocation of manufacturing processes to the Mainland were the major contributory factors.

Employment of manual workers at building and construction sites dropped by 5 per cent in September 2001 over a year earlier, sharply reversing the increases of 18 per cent in March and 1 per cent in June. This was attributable entirely to the severe decline of 24 per cent in employment at public sector sites, upon the completion or winding down of several major public housing projects and the further scaling back in the Public Housing Programme. It more than offset the 18 per cent rise in employment at private sector sites, brought about by a pick-up in private sector building activity. Taking into account off-site workers and related professional and support staff, total employment in the building and construction sector as a whole shrank by 3 per cent in the third quarter of 2001 over a year earlier, following a rise of 2 per cent in the first quarter and a fall of 5 per cent in the second quarter (Chart 12).

Chart 12

Employment by broad economic sector

Number ('000)

2500

Service sectors as a whole

(left scale)

2.000

1 500

1 000

500

Building and construction sites

(right scale)

Number ('000)

100

90

80

70

60

Manufacturing sector (left scale)

50

0

40

M J SD M J SD M

J

SDM

1996

1997

1998

J SD M

1999

JSD M J S

2000

2001

56

Employment moderated across all the broad economic sectors, especially in the latter part of 2001, consequential to the downturn in economic activity.

Labour income registered a modest increase in the first three quarters of 2001, mainly attributable to the pay rise made at the beginning of the year on the basis of improved business conditions in 2000. Overall labour earnings in the private sector