ENG-2013 — Page 62

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The Economy

border financial and commercial activities, especially in the second half of the year when global business sentiment improved somewhat. Yet exports of transportation and trade-related services remained rather subdued alongside the weak international and regional trade flows.

Chart 1

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

Per cent

20

18

16

Nominal GDP

14

Real GDP

12

10

8

6

4

2

0

-2

-4

-6

-8

-10

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

The Hong Kong economy grew moderately in 2013, mainly held back by weak external demand.

The domestic sector maintained steady growth. Private consumption expenditure grew further, thanks largely to the favourable job and income conditions. Investment rose only moderately, due to relapse in private sector construction activities. Yet infrastructure construction works remained hectic, while investment in machinery and equipment attained another year of double-digit growth.

The labour market was tight, with job vacancies rising to record highs and total employment sustaining notable growth. The seasonally adjusted unemployment rate edged down to 3.2 per cent in the fourth quarter, indicating a tight labour market. Against this background, wages and earnings registered further gains, with those of the lower-skilled workers benefitting further from the extra boost from the upward adjustment of the Statutory Minimum Wage rate in May.

The residential property market has cooled off visibly since March 2013. While the government's various counter-cyclical measures have helped manage short-term demand, market sentiment was also dented by expectations of the US Federal Reserve tapering its asset purchases. Trading activities fell significantly, with 50,676 sale and purchase agreements for residential property in 2013, the lowest on record. With the uptrend decelerating noticeably, overall flat prices rose by 8 per cent during 2013, the smallest annual increase since the current property market boom started in 2009.

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