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Carrie Lee

HONGKONG manufacturers can expect to benefit from the sluggish but continuing economic recovery in the United States, says a global economic and investment consultancy.

  US consumer spending this year is expected to grow by 2.9 per cent from last year to US$13.64 trillion, according to forecasts by Maria Fiorini Ramirez Inc.

  Consumer spending is forecast to see a year-on-year rise of 2.5 per cent in the fourth quarter, compared with a 3.3 per cent increase last year over 1991.

  ''As long as the US economy continues to expand, even a slow growth rate means imports will remain strong for consumer goods,'' said chief executive officer Maria Fiorini Ramirez.

  The forecasts take into account the positive effects of consumers paring down their debt levels and from the stable real estates prices in the US.

  They also take into account the negative effect on spending of higher taxes and the increased cost of health care proposed in President Bill Clinton's economic agenda.

  Hongkong manufacturers could find a promising market in the US for quality goods at competitive prices, said Ms Ramirez.

  The weakening of the US dollar against the yen meant that Hongkong goods carried more competitive prices than Japanese goods in foreign markets, including the US, she said.

  Meanwhile, the Clinton economic agenda, expected to raise corporate costs, would encourage Americans to invest in Hongkong and China, she predicted.

  ''Aside from higher corporate taxes, the implications of reforming the health care system, and extending universal benefits to the 30 million Americans who do not currently have them, will imply higher costs to individuals and businesses down the road,''she said.

  But Hongkong, where the cost of doing business was lower, would be more attractive, she said.

  ''Regardless of what happens [to the administration's policy], US manufacturers will continue to look for a lower cost structure to price their goods and meet the demands of global consumers,'' she said.

  US companies were looking for a lower tax base and a pro-business environment, which American businessmen generally believed was offered by the territory, she said.

  ''In Hongkong, the business environment is more conducive to building for the long term, partly because of the access to labour that is efficient and cheap,'' she said.



Hongkong predicted to reap benefits of recovery in US