ENG-2011 — Page 83

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Quarterly Gross Domestic Product

Year-on-year rate of change (Per cent)

Nominal GDP

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The Economy | 47

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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Hong Kong attained another year of above-trend growth in 2011, though the momentum tapered during the year.

Exports of services were more resilient, registering a solid performance for 2011 as a whole, although growth also moderated visibly towards the year-end. Vibrant inbound tourism and buoyant cross-border commercial and financial activities rendered the key impetus, but exports of trade-related and transportation services were more affected by the slowdown in merchandise trade flows.

The domestic sector performed remarkably well in 2011 and was the key growth driver. Private consumption expenditure grew robustly throughout the year, thanks to the notable job and income growth in the past year or so. Investment strengthened after the first quarter and held firm to the end of the year on hectic machinery and equipment acquisition and intensive public sector works, despite more cautious business sentiments in the latter part of the year.

The labour market was in a state of full employment. Job vacancies surged across many sectors amid the economic expansion, pushing total employment to successive new highs. The seasonally adjusted unemployment rate fell to a low of 3.2 per cent in the third quarter of 2011, only edging up to 3.3 per cent in the fourth quarter. The underemployment rate also fell successively to 1.4 per cent in the fourth quarter. Both wages and earnings recorded their largest increases since the mid-1990s, thanks to the vibrant labour demand, and an additional boost from the implementation of statutory minimum wage (SMW) since May 1, 2011.

The residential property market remained buoyant in the first half of 2011, but underwent some consolidation after mid-year amid heightened external uncertainties and successive mortgage rate hikes by local banks. Trading went sharply down, with the number of sale and purchase agreements falling to 84 462 in 2011, down 38 per cent from the high base in 2010. Overall flat prices in December 2011 fell by 4