Hong Kong Business Service
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Hong Kong’s economic growth remained moderate in the first quarter of 2014, at 2.5% year-on-year in real terms. Merchandise exports were sluggish, reflecting the slow improvements in the advanced markets. Nevertheless, services exports and the domestic sector kept expanding, thereby maintaining the labour market in a state of full employment.
The labour market stayed tight, as evidenced by the sustained low unemployment and underemployment rates, as well as the high level of private sector vacancies. On the back of the persistently tight manpower resource balance, wages and earnings sustained real improvements for
2013 as a whole. Grassroots workers continued to enjoy solid earnings growth in the first quarter of 2014.
Hong Kong Economy-Overall situation
1. The Hong Kong economy expanded moderately in the first quarter of 2014 over a year earlier, in the absence of stronger support from the external front. The US economy lost some steam on entering 2014 due to adverse weather conditions, while the recovery in Europe continued at a slow pace.The US Federal Reserve (Fed) began to taper asset purchases in January, adding volatility to the global financial conditions and negatively affecting those emerging market economies with higher inflation and larger external imbalances. Geopolitical risks also increased recently in some parts of the world, though this had not yet affected the global economy in any significant way. Against this background, trading and production activities in Asia were generally lacklustre in the first quarter. The Mainland’s export performance was also not immune to these developments, although its overall economy stayed comparatively resilient.
2. In the first quarter of 2014, Gross Domestic Product (GDP)(1) grew by 2.5% in real terms over a year earlier, slightly slower than that of 2.9% in the preceding quarter (revised from the earlier estimate of 3.0%). On a seasonally adjusted quarter-to-quarter comparison(2), real GDP grew slightly by 0.2% in the first quarter, after the 0.9% growth in the preceding quarter (revised from the earlier estimate of 1.1%).
Hong Kong Economy-Total exports of goods
1. Hong Kong’s exports had a slow start in 2014, broadly in line with the sluggish trading activity in other Asian economies. Merchandise exports (comprising re-exports and domestic exports) fell slightly by 0.3% in real terms in the first quarter of 2014 over a year earlier, after the 3.1% increase in the fourth quarter of 2013. On a seasonally adjusted quarter-to-quarter basis, merchandise exports also shrank, by 4.9% in the first quarter, reversing the 3.6% increase in the preceding quarter.
2. The external environment was rather subdued on entering 2014. The US economic growth decelerated notably in the first quarter, as the exceptionally cold winter conditions took its toll, even though indicators of business and consumer confidence suggested the underlying economic improvement should resume in the period ahead. Although the eurozone economy continued to recover, the growth pace was still slow, held back by the elevated unemployment rate, fiscal consolidation and a myriad of structural problems.
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