OFFICIAL Government statistics out this week will give a further indication of the extent of the relatively easier underlying trend that has apparently taken hold of the local economy in the last six months or so. The modest performance of the economy as a whole really stands in contrast to the activity on the local share market in the last three months of 1993 and the first few days of the new year. Perhaps, therefore, the correction in the stock market seen in the last week and a half was inevitable given some of the economic fundamentals and the effect they may have on the corporate sector. Nobody seems to have made too much of it so far but the Government will not reach its 1993 Gross Domestic Product (GDP) growth target of 5.5 per cent, which was set 0.5 per cent above its medium-term budget forecast of five per cent (revised from 5.5 percent last March). Growth will now be closer to five per cent for the year - perhaps 5.2 per cent, rather than 5.5 per cent - following 5.3 per cent growth in the first half (5.4 per cent in the first quarter and 5.1 per cent in the second), and about five per cent in the third quarter. This failure to make the Government forecast by a narrow margin is hardly something to be concerned about - nothing is gained by arguing about percentage points. But it may illustrate the relative lethargy in the real Hong Kong economy when compared to the financial market's performance. It is probably no coincidence that this comparative sluggishness became more apparent in the second half of 1993, after Chinese vice-premier Zhu Rongji announced measures to quieten the Chinese economy, rather than in the first six months. Ironically, too, it will probably be the last set of figures to come out this week that will reflect the lethargy most - the consumer price index figures to be issued on Friday. The CPI (A) figure will show consumer price inflation for the year at 8.5 per cent or thereabouts, both on a year-on-year basis and as an average rate over the whole year. That is in line with the Government forecast for the year, which is hardly surprising since the forecast has been revised down in two steps during the year from an original 9.5 per cent. More important are the factors which have enabled this further easing of inflation - from 9.4 per cent in 1992 and 12 per cent in 1991. The volatility in the consumer price inflation rate was reflected in the impact of the most erratic element of food prices during the year and there is little doubt the overall easing in inflation has much to do with food. Not only has food from across the border been generally cheaper in Hong Kong dollar terms but food commodity prices globally are at their lowest point in many years. This has inevitably helped the territory, which relies on imports for most of its food consumption. The other factor which has played a role in easing inflation - much to the bewilderment of many in the territory - is the easing of rental costs in the indices. This has been more apparent in the CPI (A) which covers lower to medium income earners and takes greater account of government housing, but the pace of growth in housing costs has also been apparent in the other indices as well. It is quite possible this will change during the coming year as private landlords try to get their yields up - and there are some signs it is already occurring. But with interest rates low, and yields on the share market now also lower, the pressure to get yields up on residential properties is not as great as it might otherwise be. But the factor that is rarely mentioned in the context of inflation, but which could be having an impact, is the fact that the pace of economic growth has remained relatively moderate. It could well be that inflation has moderated because the pressure from underlying domestic economic growth has also been moderating and will become more apparent during 1994. THE first set of statistics to be issued in the coming week will be the unemployment and underemployment figures for the three months from September to November. Not much change is expected here with the provisional figures for the November three months showing 2.1 per cent unemployment (compared with two per cent three months to October) and 1.5 per cent under employment. The economy is fully employed, and the level of vacancies, which is widespread, suggests there is still a shortage of labour in everything except the construction area and even that is narrowing. Yet the Government refuses even to consider an expansion of the present imported labour scheme, and the increase in the numbers of mainlanders allowed to cross the border will do little to help on the labour front. More important figures this week are likely to be Tuesday's release of the November orders-on-hand figures for the 200 largest manufacturers in the territory. After beginning 1993 at 4.5 months' orders and moving to 4.56 months at the end of the first quarter (March), orders-on-hand have dropped ever since to 4.34 months in October. This is still a high level by historical standards, but the trend is a concern, as are the large differences in orders between different industries. Finally, this week will also see the construction output for the third quarter issued on Thursday. This survey is likely to further emphasise the comments made in this column previously about the increased role the Government is playing in underpinning overall construction activity. The Second Quarter report, for example, showed total construction activity of $18.1 billion, an increase of 6.1 per cent on the first quarter and 11.1 per cent on a year earlier - a little ahead of inflation. But it was public works and the operations of trade contractors not operating on construction sites that helped boost the figures. Public Sector spending, mainly on infrastructure projects, totalled $6 billion for the quarter, up a full 24.6 per cent on the first quarter and a massive 48.6 per cent leap on a year earlier. The contrast can clearly be seen with the private sector. Although private sector spending in the second quarter was $6.9 billion - more than the public sector - this was down 6.5 per cent on the first quarter and 8.9 per cent on a year ago. And those figures do not take inflation into account on the costs of the construction work, so that the real decline would be much bigger. Like the sharp changes in the successive government forecasts during 1993, the construction spending figures for the third quarter will emphasise the increased public sector role. The run of statistics will continue the following week with two important figures being released - wage indices for the half year to September and external merchandise trade results for December and the full calendar year. Ian Perkin is chief economist with the Hong Kong General Chamber of Commerce. The views expressed in this column are his own and may not necessarily reflect chamber policy.