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二零零六年二月二十二日二零零六年二月二十二日22 February 200622 February 2006

香港經濟概況香港經濟概況Hong Kong economy’s overviewHong Kong economy’s overview

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Economic performance

• 9 quarters of above-trend growth

• Broad-based upturn

• Trade, financial and producer services, and tourism are the bright spots; but construction still weak

• Significant and broad-based job creation; wages improving gradually

• Inflation creeping up but still low

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Spectacular GDP growth all through 2005

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Double-digit export growth for 3 years in a row

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Domestic demand also played a role in recovery

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2001-2003 2004 2005 Q1-Q3

(%) (%) (%)

Manufacturing -9.8 1.7 0.8

Construction -2.9 -9.8 -4.4

Services 3.0 9.9 8.1

Wholesale, retail and import and export trades, restaurants and hotels

4.6 15.1 11.2

Transport, storage and communications

3.0 13.9 13.5

Financing, insurance, real estate and business services

2.9 13.1 9.3

Community, social and personal services

1.3 2.6 0.7

GDP growth led by trading and financial/professional services

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Broad-based improvement in labour market

• Unemployment down in all sectors, for all age

groups and at all levels of education attainment

• Long-term unemployment declining

• Wages rising back; earnings of lower-income

families also improving

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Some 240 000 jobs created since 2003 trough

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Both unemployment rate and unemployment CSSA cases are falling

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Labour income rising back

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Workers earning $5,000 – $8,999 down markedly …while those earning $15,000 or more rose

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2006 Economic outlook

• GDP growth to settle back to more sustainable growth of 4 - 5%, still above past 10-year trend of 3.9%

• Another year of broad-based growth

• But risks from external environment and feed-through of higher interest rates

• Labour market to improve further

• Inflation edging up but still healthy

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Economy set for still solid growth in 2006

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Inflation creeping up but still low in 2006

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Structural issues in labour market

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Structural unemployment holding back the improvement in unemployment rate?

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Current pace of employment creation actually stronger than those in the past

(Time path of total employment in current upturn cf an average economic cycle in 80s and 90s)

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Long-term unemployment rate falling in all age groups

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…. and improving even for those with lower education

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Why unemployment still so high ?

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Construction still on distinct downtrend despite strong economic recovery

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Also, consumer demand has yet to fully recover

Per capita consumption

2005

% change

over 1997

($’000)

Private consumption expenditure

117 -9.2

Consumption in Hong Kong 104 -10.5

Travel 12 -0.9

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Result is GDP still way below trend growth experienced before the AFC

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Still cyclical unemployment in overall terms

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But labour force actually adjusting well to structural changes

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No. of higher-skilled

workersShare in

employment*

(’000) (%)

1995 780 28

2000 966 32

2005 1 159 36

Today, one out of three people in the workforce working at the managerial,

professional or administrative level

(*) Excluding FDH workers

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No. of workerswith tertiaryeducation*

Share in workforce*

(’000) (%)

1995 526 19

2000 758 25

2005 956 30

Increasing number of workers having tertiary education

(*) Excluding FDH workers

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Value-added per service sector job on avg 60% higher than manufacturing

379343Economy average

303279Community, social and personal services

551781Financing, insurance, real estate and business services

20041994

362272Transport, storage and communication

304241W/R, I/E and R/H

398381Services

248190Manufacturing

(’000)(’000)

Value added per person

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The rising share of services in HK’s economy

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Remarkable productivity track record

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