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PEOPLE see a pall of gloom hanging over the economy, according to the South China Morning Post's quarterly opinion survey.

But while their personal financial situation looks equally grim, belt-tightening is not higher on the agenda than in previous surveys.

Political confidence has bounced back significantly since its October 1994 low, the survey shows; and fewer people say they are less likely to be making major purchases in the next three months than in the past quarter.

Indeed, the best news from the latest Survey Research Hong Kong (SRH) Economic and Political Confidence Index is on the political front. Here public opinion has continued on last year's roller-coaster ride, soaring back to equal the heights attained in January and July.

No less than 73 per cent of respondents expressed confidence in the future of the territory, compared with 55 per cent in October.

Although the survey gives no indication of what might have restored public optimism, it does find respondents were not too disturbed by the resignation of Lau Chin-shek from the Legislative Council.

The survey found almost one-third of respondents felt the resignation would have a positive effect on the relationship between the Government and the legislature. Forty-two per cent thought it would have no effect one way or the other, while a quarter believed the impact would be negative.

The Political Confidence Index returned to 91 from 88 points, although it has never regained the regular scores of 95 and 96 reached before the June 4, 1989 Beijing massacre.

But the survey traces a rapid, 10.5 per cent decline in the public's perception of Hong Kong's economic performance over the past year, from 95 points to a two-year low of 85.

In the 10 years since the Post first commissioned SRH to track public opinion, the only time the economic index dipped lower was during the Gulf War.

The survey gives no clue as to why its representative sample of 1,007 respondents took such a negative view.

However, since the soundings were taken in the first two weeks of January, analysts say it is a fair bet views would have been hit by the brief run on the Hong Kong dollar and the continuing plunge on the stock market.

 Only 15 per cent of respondents thought the present economic situation was good, compared with 24 per cent in October, while 28 per cent described it as bad. In October only 18 per cent said it was bad.

 The change of heart was strongest among better educated men over 25 with well-paid jobs.

 A less dramatic pattern emerged from views of the economic outlook for the next 12 months, with the proportion believing it would improve more or less unchanged at 17 per cent. However a larger proportion - 39 per cent, compared with 32 per cent in October - believed the economy would deteriorate.

 Again, it was the better-paid, better-educated respondents who expressed the gloomiest views.

 This trend was even more marked regarding the outlook for personal finances. Among the 12 per cent of respondents in the professional, executive and self-employed businessman groups, just 24 per cent thought their situation would improve, compared with 40 per cent in October.

 Yet among the sample as a whole, the proportion believing their situation would improve fell only five percentage points to 20 per cent.

 In stark contrast, SRH's Purchase Intention Index, bounded back to last summer's high of 94, from October's low of 87.

 However, this should not necessarily be taken as a contradiction of the public's views on the territory's economic outlook. SRH comments that the increase is not so much a reflection of an increase in the number of respondents likely to make a major purchase than of a reduction in the numbers planning to curb spending.



Public sees pall hanging over economy