ENG-2002 — Page 87

THE ECONOMY

per cent in real terms in the first three quarters of 2002 over a year earlier, reversing a 4.3 per cent fall in 2001. This was mainly attributable to more intensive work on some of the major private sector development projects during the year (Chart 12).

Chart 12

Net output or value added by major economic sector (year-on-year rate of change in real terms*)

Per cent

6

4

Services

Construction

2

0

-2

-4

-6

-8

-10

-12

-14

01

으

Manufacturing

Q2

Q3

Q4

Q1

Q2

Q3

2001

2002

Net output of both the services and construction sectors showed modest increases in 2002. Net output of the manufacturing sector, however, continued. to decline.

* Growth rates before the first quarter of 2001 are not available.

The Labour Market

The labour market, though still slack in 2002, showed some improvement in the latter part of the year, when total employment picked up amidst an upturn in economic activity. For 2002 as a whole, the unemployment rate averaged at 7.3 per cent, markedly higher than that of 5.1 per cent in 2001. A surge in the seasonally adjusted unemployment rate was observed in the early part of the year, from 6.2 per cent in the fourth quarter of 2001 to 7.0 per cent and 7.7 per cent respectively in the first two quarters of 2002, and further to a peak of 7.8 per cent in May-July, consequential to more extensive downsizing and lay-offs in the corporate sector. This was followed by a steady decline in the latter part of the year, to 7.4 per cent in the third quarter and then to 7.2 per cent in the fourth quarter. On the median duration of unemployment, there was a distinct lengthening over the year, from 82 days in the fourth quarter of 2001 to 90 days in the fourth quarter of 2002. The proportion of persons unemployed for six months or more likewise went up visibly, from 24 per cent to 30 per cent.

The underemployment rate also moved higher, averaging at 3.0 per cent in 2002, as against 2.5 per cent in 2001. It rose from 3.0 per cent in the fourth quarter of 2001 to

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