Financial Capsule

Unemployment Eases Slightly

The seasonally adjusted unemployment rate declined slightly, from 8.7% in May-July 2003 to 8.6% (provisional) in June-August 2003. The underemployment rate also fell, from 4.2% to 4.0% (provisional) between the two periods.

Total labour force stood at 3,511,000 (provisional) in June﷓August 2003, virtually unchanged from 3,510,800 in May-July 2003. Total employment was also little changed, at 3,201,000 (provisional) as against 3,201,500.

The number of unemployed persons (not seasonally adjusted) in June﷓August 2003 was 309,000 (provisional), similar to the May-July 2003 figure of 309,200. The number of underemployed persons fell by around 7,700, from 148,700 to 141,000 (provisional).

Comparing June-August 2003 with May-July 2003, decreases in the unemployment rate (not seasonally adjusted) were observed mainly in decoration and maintenance, restaurants/hotels, transport, manufacturing and financing, more than offsetting the increases observed in the import/export trade, real estate, education services, and amusement and recreational services. As 
to the underemployment rate, decreases were concentrated in decoration and maintenance, restaurants/hotels, transport, education services, and amusement and recreational services. 

Exports and Imports Continue to Increase

The values of Hong Kong's total exports and imports of goods both continued to increase in August 2003 over a year earlier, according to figures released by the Census and Statistics Department on September 26. 

In August 2003, the value of total exports of goods (comprising re-exports and domestic exports) increased by 7.0% over a year earlier to HK$151.2 billion (CAD$27 billion), after a year-on-year increase of 7.6% in July. Within this total, the value of re-exports increased by 7.9% to HK$139.4 billion (CAD$24.5 billion) in August, but the value of domestic exports fell by 2.4% to HK$11.8 billion (CAD$2.07 billion). Concurrently, the value of imports of goods rose by 6.0% over a year earlier to HK$152.9 billion (CAD$27.2 billion) in August 2003, after a year-on-year increase of 5.6% in July. 

A visible trade deficit of HK$1.7 billion (CAD$298 million), equivalent to 1.1% of the value of imports of goods, was recorded in August 2003. This was smaller than the corresponding deficit of HK$3.1 billion (CAD$543 million), equivalent to 
2.1% of the value of imports of goods, recorded in the same month in 2002. 

For the first eight months of 2003 as a whole, the value of total exports of goods rose markedly, by 12.6% over the same period in 2002. 

CPI falls 3.8% in August

Overall consumer prices fell by 3.8% in August from a year earlier, smaller than the 4% decrease in July. Relief measures, namely the rates concession and the waiver of water and sewage charges, are posing an appreciable downward effect on the Consumer Price Index.

GDP Down Slightly, Exports Up 14%

In the second quarter of 2003, the Gross Domestic Product (GDP) decreased by 0.5% in real terms over a year earlier, compared with the growth of 4.5% in the first quarter of 2003. 

On a seasonally adjusted quarter-to-quarter comparison, GDP recorded a decline of 3.7% in real terms in the second quarter of 2003. 

Total exports (comprising re-exports and domestic exports) recorded a double-digit growth of 14.3% in real terms in the second quarter of 2003 over a year earlier, moderating from the 19.1% growth in the first quarter of 2003. Imports of goods increased by 10.9% in real terms in the second quarter of 2003. 

On invisible trade, exports of services fell by 14.7% in real terms in the second quarter of 2003 over a year earlier, in sharp contrast to the 12.6% increase in the first quarter of 2003. Imports of services also decreased significantly by 19.6% 
in the second quarter of 2003. Inbound tourism and resident outbound travel were hard hit with the outbreak of Severe Acute Respiratory Syndrome (SARS). 

The implicit price deflator of GDP, as an overall measure of inflation in the economy, recorded a year-on-year decline of 5.5% in the second quarter of 2003.

Retail Sales Register Decrease

The value of total retail sales in July 2003, provisionally estimated at HK$14.6 billion (C$2.6 billion), decreased by 2.7% compared with July 2002. After netting out the effect of price changes over the same period, the overall volume of retail sales decreased by 0.5% in July 2003 from a year earlier. 

The revised estimate on the value of total retail sales in June 2003 was HK$13.6 billion (C$2.5 billion) down by 6.5% in value or 3.3% in volume from a year earlier. 

Foreign Currency Reserve Assets Figures Released

The Hong Kong Monetary Authority announced that the official foreign currency reserve assets of Hong Kong amounted to US$111.8 billion at the end of August 2003 (end-July 2003: US$112.6 billion) Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of August 2003 stood at US$111.4 billion (end-July 2003: US$112.6 billion).

Hong Kong is the world's fifth largest holder of foreign currency reserves, after Japan, Mainland China, Taiwan and Korea. 

Port Cargo Throughput Increases 

In the second quarter of 2003, total port cargo throughput increased by 4% over a year earlier to 51.2 million tonnes. Within this total, inward and outward port cargo were up by 2% and 8% to 31.6 million tonnes and 19.6 million tonnes, respectively. 

However, compared with the first quarter of 2003 on a seasonally adjusted basis, total port cargo throughput was down by 6% in the second quarter of 2003. Within this total, inward and outward port cargo decreased by 9% and 1%, respectively. The removal of seasonal effects by statistical means in these series enables more meaningful shorter-term comparison to be made for discerning possible variations in trends. 

Within inward port cargo, imports decreased by 4% over a year earlier to 20.5 million tonnes in the second quarter of 2003, while inward transshipment surged by 14% to 11.0 million tonnes. For outward port cargo, exports (including domestic exports and re-exports) decreased by 2% over a year earlier to 8.0 million tonnes, while outward transshipment soared by 15% to 11.6 
million tonnes. 

Comparing the second quarter of 2003 with the second quarter of 2002, double-digit increases were recorded in the tonnage of inward port cargo loaded in Indonesia (+29%) and the mainland of China (+11%). These more than offset the declines in inward port cargo loaded in Singapore (-18%), the Republic of Korea (-17%), and the United States (-11%). Double-digit increases were registered in the tonnage of outward port cargo for discharge in Indonesia (+47%), Italy (+35%), Taiwan (+25%), the Netherlands (+19%), and Japan (+13%). 

Passenger Figures Climbing

Passenger traffic at Hong Kong International Airport (HKIA) continued to improve in August, reaching more than 90% of pre-SARS level. 

Visitors from most of Hong Kong’s main markets have returned to pre-SARS levels, while traffic from Japan and North America was at 90%. A total of 3.02 million passengers passed through HKIA in August, 22.3% higher than in July. Passenger flights were also up by 23% during the period. 

Cargo throughput for the month was 219,000 tonnes, up 5.5% year-on-year, mainly driven by growth in exports to the major markets of Europe, Taiwan and the Mainland. 

Total aircraft movement was 16,885, down 7.9%, with cargo flights increasing by 13.1%. 

For the rolling 12 months to August 2003, passenger throughput totalled 27.7 million, a decrease of 16.4%, while cargo was up 10.6% at 2.57 million tonnes.

August records 1.6M Visitor Arrivals

Some 1,644,880 visitor arrivals were recorded in August, 9.6% up on the 1.5 million arrival in August last year.

The results mark a V-shaped recovery for Hong Kong’s tourism industry, following year-on-year shortfalls of 64.8% in April, 67.9% in May, 38.2% in June and 5.6% in July.

Boasted by individual visits, Mainland arrivals hit an all-time high of 946,122 for the month, a 43.4% increase in August last year.

Average occupancy rate for all categories of hotels and tourist guesthouses in Hong Kong was 88% in August, compared with 86% for the same month last year.

The Hong Kong Tourism Board said it is the highest figure this year, reflecting the continued strong recovery from the 71% average occupancy in July, 34% in June and just 18% in May.

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