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Output fall fuels recession fears

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

Results from the Census & Statistics Department show that output fell 3.6% last year to HK$119bn ($51.2bn), compared with $15.65bn in 1999 and $14.5bn in 1996.

The downward slide was only slowed by a rise in public works to $6.3bn last year, compared with $6bn 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, led the warning of possible job cuts.

'Companies are already finding it difficult keeping people busy, ' he told NCEI.

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

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

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

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