1. 1 二零零六年二月二十二日 22 February 2006 香港經濟概況 Hong Kong economy’s overview

2. 2 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

3. 3 Spectacular GDP growth all through 2005

4. 4 Double-digit export growth for 3 years in a row

5. 5 Domestic demand also played a role in recovery

6. 6 2001-2003 20042005 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 4.615.111.2 Transport, storage and communications 3.013.913.5 Financing, insurance, real estate and business services 2.913.1 9.3 Community, social and personal services 1.3 2.60.7 GDP growth led by trading and financial/professional services

7. 7 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

8. 8 Some 240 000 jobs created since 2003 trough

9. 9 Both unemployment rate and unemployment CSSA cases are falling

10. 10 Labour income rising back

11. 11 Workers earning $5,000 – $8,999 down markedly … while those earning $15,000 or more rose

12. 12 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

13. 13 Economy set for still solid growth in 2006

14. 14 Inflation creeping up but still low in 2006

15. 15 Structural issues in labour market

16. 16 Structural unemployment holding back the improvement in unemployment rate?

17. 17 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)

18. 18 Long-term unemployment rate falling in all age groups

19. 19 …. and improving even for those with lower education

20. 20 Why unemployment still so high ?

21. 21 Construction still on distinct downtrend despite strong economic recovery

22. 22 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 Kong104-10.5 Travel12-0.9

23. 23 Result is GDP still way below trend growth experienced before the AFC

24. 24 Still cyclical unemployment in overall terms

25. 25 But labour force actually adjusting well to structural changes

26. 26 No. of higher-skilled workers Share in employment* (’000)(%) 199578028 200096632 20051 15936 Today, one out of three people in the workforce working at the managerial, professional or administrative level (*)Excluding FDH workers

27. 27

28. 28 No. of workers with tertiary education* Share in workforce* (’000)(%) 199552619 200075825 200595630 Increasing number of workers having tertiary education (*)Excluding FDH workers

29. 29 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) Value added per person

30. 30 The rising share of services in HK’s economy

31. 31 Remarkable productivity track record

32. 32 謝謝 Thank You