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Hong Kong construction recession looms

HONG KONG'S construction output has fallen to its lowest level since 1996, according to government figures released last week, putting thousands of jobs in the industry at risk.

Results from the Census & Statistics Department show that output fell 3.6% last year to £10.6bn, compared with £10.9bn in 1999 and £10.1bn in 1996.

The downward slide was only saved from a deeper spiral by a rise in public works to £4.4bn last year, compared with £4.2bn in 1999. This includes spending by the two railway corporations on the West Rail and East Rail schemes and the Tseung Kwan O line, together with government works.

Patrick Chan Wing-tung, secretary general of the Hong Kong Construction Association (HKCA), led the warning of possible job cuts. 'Companies are already finding it difficult keeping people busy, ' he told NCE, adding that he believed redundancies were inevitable if conditions remained the same.

Chan added that the continuing decline in workload would make construction more competitive, with intense cut throat bidding and the increasing likelihood of more scandals involving poor workmanship - a reference to the recent raft of cases of poor quality work which have dogged the industry over the last three years.

Chris Morgan, managing director of Cannonway Consultants, added: 'Frankly, these figures reflect the picture we have almost come to expect in the construction industry - a continuing decline in turnover. Not only is turnover down on the year, but turnover in the final quarter was down 3% on the third quarter of 2000.'

The recent start of construction on the Kowloon-Canton Railway Corporation's two East Rail extensions has brought a welcome fillip, but industry observers warn of deeper problems in 2004-05 when all major rail projects will be finished.

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