ENG-2012 — Page 63

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The Economy

services slackened on dampened market sentiment and quieter fund-raising activities. Exports of travel services nonetheless maintained notable growth.

Chart 1

Quarterly Gross Domestic Product (year-on-year rate of change)

Per cent

20

18

16

14

12

10

8

6

2

0

-2

-4

-6

Nominal GDP

Real GDP

The

-8

-10

ייד

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Hong Kong saw a below-trend growth in 2012, dragged by weak external demand.

The domestic sector stayed rather resilient. Private consumption expenditure grew steadily, thanks to largely stable employment and improved income conditions. Investment continued to see appreciable growth, as infrastructure works continued apace, private building and construction activity picked up strongly, and machinery and equipment acquisition sustained notable growth.

The labour market remained in a state of full employment. Job vacancies continued to surge across many sectors, in tandem with the continued notable growth in total employment to a fresh record high in the fourth quarter, with the seasonally adjusted unemployment rate staying low at 3.3 per cent. Amid the continuing generally tight job conditions, wages and earnings saw further solid broad-based growth, though the rates of increase narrowed in the latter half of the year amid the slower economic growth and waning of the boost from statutory minimum wage implementation.

Amid the low interest rates and a tight demand-supply balance of flats, the residential property market was buoyant during most of 2012. Market sentiment reached a high in September upon the announcement of further monetary easing measures in the major advanced economies, before showing some cool-off in November after the Government introduced further measures to combat speculation and manage demand from non-local buyers. Overall flat prices in the fourth quarter of 2012 surged by 24 per cent over a year earlier. Trading gathered momentum from February but plunged to very subdued levels after November. There were 81,333 sale and purchase agreements in 2012, 4 per cent lower than in 2011.

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