The Hong Kong Leading Indicator showed an unexpected jump in April, pointing to a pick up in economic activity early next year. The monthly indicator, developed by Merrill Lynch in association with the South China Morning Post, measures a range of factors that tend to predict economic growth in about nine months time. April's indicator rose 2.1 per cent from March, due largely to a strong demand for imports from the United States. US imports jumped 17.6 per cent by volume in April compared with last year, posting their second month of double-digit growth. Merrill Lynch economist Shawn Xu played down the significance of the sharp rise because of Hong Kong's weakening dependency on US demand. 'Exports to the US accounted for 21.2 per cent of Hong Kong's total exports in 1996, compared with 30.8 per cent in 1985. 'Statistically, the degree of correlation between Hong Kong GDP [gross domestic product] growth and US import growth is considerably lower for the 1990s than for the 1980s.' Other data measured by the indicator pointed in opposite directions. 'On the negative side, growth of outstanding residential property loans decelerated in April, together with that of China's industrial output,' Mr Xu said. On the other hand, Hong Kong's lower inflation and higher monetary growth were positive signs for future economic activity, he said. Mr Xu concluded that GDP growth might pick up slightly in the first quarter of next year, but would remain relatively stable.