MACAO ECONOMIC BULLETIN

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MACAO ECONOMIC BULLETIN

This is a joint publication of the Macao Economic Services (DSE), the Monetary Authority of Macao (AMCM) and the Statistics and Census Service (DSEC). DSE prepares the analysis of the World Economy and External Merchandise Trade, as well as data on tables I.1, I.2, II.7 and II.8. AMCM prepares the analysis of Money and Finance and data on tables VIII.1 to VIII.7. DSEC prepares the analysis and data on the remaining sections.

Further information can be obtained from the Documentation and Information Centre of DSEC.

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Reproduction of these data is allowed provided the source is quoted.

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Quarter

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Editor: DSEC

Macao, January 2015

Typesetting and design: DSEC Printing: DSEC

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CONTENTS

THE WORLD ECONOMY... 9

ANALYSIS OF THE MACAO ECONOMY I. OVERVIEW ... 15

II. MAJOR SEGMENTS OF THE ECONOMY A. EXTERNAL MERCHANDISE TRADE ... 16

B. TOURISM, GAMING AND MICE ... 19

C. CONSUMPTION AND PRICES ... 22

D. EMPLOYMENT ... 24

E. INVESTMENT ... 25

F. PUBLIC ACCOUNTS ... 27

G. MONEY AND FINANCE ... 28

H. OTHER ECONOMIC INDICATORS ... 29

III. CONCLUDING REMARKS ... 30

TABLES I. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD AND MACAO 1. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (YEAR-ON-YEAR COMPARISON) ... 33

2. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (QUARTER-TO-QUARTER COMPARISON) ... 35

3. GROSS DOMESTIC PRODUCT OF MACAO ... 35

4. PRINCIPAL ECONOMIC INDICATORS OF MACAO ... 36

II. EXTERNAL MERCHANDISE TRADE 1. PRINCIPAL STATISTICS ON EXTERNAL MERCHANDISE TRADE ... 37

2. PRINCIPAL STATISTICS ON EXPORTS ... 38

3. PRINCIPAL STATISTICS ON DOMESTIC EXPORTS ... 39

4. PRINCIPAL STATISTICS ON RE-EXPORTS ... 40

5. STRUCTURE OF EXPORTS BY MARKET AND TYPE OF GOODS ... 40

6. PRINCIPAL STATISTICS OF IMPORTS…... 41

7. EXPORT ORDERS ON HAND AND EXPORT PERFORMANCE OUTLOOK OF SELECTED MANUFACTURING INDUSTRIES ... 42

8. EXPORT PERFORMANCE OUTLOOK FOR THE NEXT 6 MONTHS OF SELECTED MANUFACTURING INDUSTRIES ... 42

III. TOURISM, GAMING AND MICE 1. INDICATORS OF THE GAMING SECTOR ... 43

2. GROSS GAMING REVENUE, TAX REVENUE FROM GAMING AND CONTRIBUTION TO THE ECONOMY...44

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3. VISITOR ARRIVALS...45

4. HOTEL GUESTS...46

5. SPENDING OF VISITORS...47

6. AVERAGE LENGTH OF STAY OF VISITORS...48

7. MICE STATISTICS……...48

IV. CONSUMPTION AND PRICES 1. PRICE INDICES ... 49

2. RETAIL SALES ... 50

3. SALES VOLUME INDEX ... 50

V. POPULATION AND LABOUR FORCE 1. PRINCIPAL STATISTICS ON POPULATION AND EMPLOYMENT ... 51

2. MEDIAN MONTHLY EMPLOYMENT EARNINGS OF THE EMPLOYED POPULATION ... 51

3. EMPLOYED POPULATION BY GENDER, AGE GROUP AND INDUSTRY ... 52

4. JOB VACANCIES ... 52

5. UNEMPLOYED POPULATION BY AGE GROUP, INDUSTRY AND REASONS OF UNEMPLOYMENT ... 53

6. UNDEREMPLOYED POPULATION BY INDUSTRY AND REASONS OF UNDEREMPLOYMENT... 54

7. NON-RESIDENT WORKERS ... 54

VI. CONSTRUCTION AND REAL ESTATE 1. PRIVATE SECTOR CONSTRUCTION ... 55

2. PURCHASE AND SALE OF BUILDING UNITS ... 56

3. PURCHASE AND SALE OF BUILDING UNITS BY END-USE OF UNIT AND BUYER’S STATUS ... 57

4. AVERAGE PRICE PER SQUARE METRE OF RESIDENTIAL UNITS, OFFICES AND INDUSTRIAL UNITS PURCHASED AND SOLD...58

5. PUBLIC WORKS...58

VII. PUBLIC ACCOUNTS 1. PUBLIC REVENUE AND EXPENDITURE ... 59

2. PUBLIC REVENUE ... 60

3. PUBLIC EXPENDITURE ... 61

4. PUBLIC INVESTMENT ... 61

VIII. MONEY AND FINANCE 1. MONETARY SURVEY ... 62

2. RESIDENT DEPOSITS ... 63

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3. DOMESTIC LOANS TO THE PRIVATE SECTOR – SECTORAL DISTRIBUTION ... 64

4. MORTGAGE LOANS...64

5. LOAN-TO-DEPOSIT RATIOS OF LOCAL MONETARY INSTITUTIONS...65

6. EXCHANGE RATES OF THE MACAO PATACA AGAINST MAJOR CURRENCIES AND EFFECTIVE EXCHANGE RATE INDEX OF MACAO PATACA...66

7. INTEREST RATES OF THE MACAO PATACA ...66

IX. OTHER ECONOMIC INDICATORS 1. NEW INCORPORATIONS AND COMPANIES IN DISSOLUTION ... 67

2. TRANSPORT ... 68

3. COMMUNICATIONS ... 69

4. CONSUMPTION OF WATER, ELECTRICITY, FUELS AND CEMENT ... 69

5. OUTBOUND TRAVEL OF MACAO RESIDENTS ... 70

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THE WORLD ECONOMY

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Global economic recovery was mild and uneven in the third quarter of 2014. Despite further expansion in the US economy and steady increase in the Asian region, the Euro area was at risk of deflation and stagnant growth while the economy of Japan saw a downward turn, posing continuous threats to sustained global recovery. The World Economic Outlook (WEO) of the International Monetary Fund (IMF) in October 2014 indicated that the world economy slipped into “mediocre” growth. With countries facing the legacies of the global financial crisis (including debt overhangs, high unemployment, etc.) and lower potential growth, the evolution of the global economy had become more differentiated and the downside risks were clear. The world economy is projected to grow by 3.3% in 2014, down by 0.1 percentage point from the July forecast; the growth projection for 2015 is lowered by 0.2 percentage points to 3.8%.

The US economy continued to improve in the third quarter, with Gross Domestic Product (GDP) rising by 2.4% year-on-year and 3.9% quarter-to-quarter. The expansion was mainly spurred by the increase in private consumption expenditure and fixed investment, contributing 1.5 and 1.0 percentage points to economic growth; government expenditure and exports also added 0.8 and 0.7 percentage points respectively to the increase. The unemployment rate showed no significant change amid satisfactory economic performance, up modestly by 0.1 percentage point quarter-to-quarter to 6.2%;

the seasonal adjusted unemployment rate stood at 6.1%.

Economic growth in the Euro area remained weak with sluggish growth in Germany and France; the third quarter GDP increased by 0.8% year-on-year and 0.2%

quarter-to-quarter. Consumption expenditure of households and non-profit institutions as well as exports contributed 0.3 percentage points each to economic growth while government final consumption expenditure also added 0.1 percentage point to the increase; however, imports dragged down the economic growth by 0.5 percentage points.

The unemployment rate dropped further by 0.3 percentage points quarter-to-quarter to 11.1%.

Growth of the UK economy slowed slightly, with GDP for the third quarter rising by 3.0% year-on-year and 0.7% quarter-to-quarter. Service and construction sectors expanded further, both up by 0.8% quarter-to-quarter. Household final consumption expenditure and gross capital formation were the main drivers of economic growth, with a contribution of 0.5 percentage points each; meanwhile, net exports dragged down the increase by 0.5 percentage points. Given the continuous economic growth, the unemployment rate improved further, down by 0.3 percentage points quarter-to-quarter to 6.0%.

Economic growth in the Asian region was stable on the back of a mild global

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economic recovery. The October WEO of IMF indicated that the ASEAN 5^a economies are projected to expand by 4.7% in 2014, up by 0.1 percentage point from the July forecast;

the projection for the Middle East, North Africa, Afghanistan and Pakistan is lowered by 0.4 percentage points to 2.7%; China is projected to maintain growth at 7.4% while the projection for India is 5.6%, up by 0.2 percentage points.

In Japan, GDP for the third quarter decreased by 1.2% year-on-year and 0.4%

quarter-to-quarter, representing two consecutive quarters of negative growth. Lingering impact of consumption tax hike stifled domestic demand, which dragged down economic growth by 0.5 percentage points; exports saw slight improvement, contributing 0.2 percentage points to the increase. In spite of the renewed economic contraction, the unemployment rate edged down by 0.1 percentage point to 3.6%; the seasonal adjusted rate also stood at 3.6%.

The economy of the Republic of Korea showed signs of slowdown, with the third quarter GDP rising by 3.2% year-on-year and 0.9% quarter-to-quarter. Gross capital formation and final consumption expenditure contributed 1.0 and 0.9 percentage points respectively to economic growth whereas exports dragged down the increase by 1.4 percentage points. The unemployment rate, not being affected by the economic slowdown, declined by 0.4 percentage points quarter-to-quarter to 3.3%.

In Mainland China, GDP for the third quarter expanded by 7.3% year-on-year, down by 0.2 percentage points from the previous quarter. In the first three quarters of 2014, value added of the above-scale industries rose by 8.5% year-on-year, down by 0.3 percentage points compared with the first half year; fixed asset investment increased by 16.1% year-on-year, down by 1.2 percentage points. Retail sales of consumer goods rose by 12.0% year-on-year, down by 0.1 percentage point, of which sales of communication equipment increased by 24.3%, Chinese and Western medicine by 15.1% and furniture by 14.5%. Total value of external trade for the first three quarters increased by 3.4%

year-on-year and the trade surplus amounted to USD231.7 billion. Inflation went down slightly as the Consumer Price Index (CPI) growth fell from 2.3% in the second quarter to 2.1% in the third quarter, with the CPI for September rising by 1.6% year-on-year.

The Hong Kong economy picked up in growth momentum in the third quarter of 2014, expanding by 2.7% year-on-year and 1.7% quarter-to-quarter, underpinned by both domestic and external demand. Private consumption expenditure strengthened, up by 3.2% year-on-year; government consumption expenditure maintained steady growth at 3.5%; gross fixed capital formation declined by 4.7% year-on-year upon subdued

a Indonesia, Malaysia, the Philippines, Thailand and Vietnam

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machinery and equipment acquisition; merchandise exports grew marginally by 1.3%

year-on-year while exports of services reverted to growth at 2.0%. The unemployment rate edged up by 0.1 percentage point quarter-to-quarter to 3.4%, and the seasonal adjusted rate was 3.3%.

GDP of major economies (Year-on-year change)

-2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

USA Euro Area Japan Mainland

China

United Kingdom

Hong Kong

%

Q2/2014 Q3/2014

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ANALYSIS OF THE MACAO ECONOMY

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I. Overview

In the third quarter of 2014, the economy of Macao contracted by 2.1% year-on-year in real terms, the first negative quarterly growth in five years. The economic downswing was caused by a substantial decline in exports of services. In terms of external demand, decrease in exports of gaming services widened while exports of other tourism services declined, greatly dragging down exports of services. As regards domestic demand, gross fixed capital formation increased substantially while private consumption expenditure grew amid stable employment conditions.

The following highlights year-on-year comparisons of major segments of the local economy in the third quarter of 2014:

1. Merchandise exports and imports maintained growth momentum. Total value of merchandise exports increased by 6.3%, of which exports of machines, apparatus &

parts rose substantially by 62.4%. Total value of merchandise imports increased by 9.2%, with imports of consumer goods, which took up a significant share of the total, rising by 6.1%; imports of raw materials & semi-manufactures and capital goods increased by 21.1% and 20.1% respectively, reflecting strong domestic demand. A visible trade deficit of MOP19.83 billion was recorded.

2. Despite an increase in visitor arrivals, exports of gaming and tourism services decreased. Visitor arrivals increased by 6.1%; nevertheless, the gaming sector has been undergoing significant adjustment, with gross gaming revenue decreasing by 7.0%. In addition to the effect of inflation, exports of gaming services declined further by 12.3% while exports other tourism services dropped slightly by 0.7%, together lowering exports of services by 9.9%; meanwhile, imports of services declined by 17.8%.

3. In spite of the economic contraction, the job market has yet to be affected while inflation remained high. The unemployment rate stayed extremely low at 1.7% for a long time amid stable employment conditions; median monthly employment earnings increased by 8.3%. Non-resident workers rose by 24.5% year-on-year to 162,877 at the end of the third quarter due to the strong demand for manpower. Prices grew at a slightly slower pace, with the Composite Consumer Price Index (Composite CPI) rising by 5.9%, down to the level in the fourth quarter of 2013, but inflationary pressures remained high. Private consumption expenditure increased by 7.2% and government final consumption expenditure expanded by 8.1%.

4. Private investment, not being affected by the economic contraction, maintained robust

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growth. With the commencement of construction for large-scale tourism and entertainment facilities, private investment surged by 41.5%, of which construction investment and equipment investment rose by 43.8% and 28.9% respectively. Public investment saw average performance, rising modestly by 5.0%. Number of new incorporations increased by 19.9%, and the value of registered capital went up by 55.6%.

5. Property market activity saw significant decrease. Number and value of building units purchased and sold tumbled by 26.2% and 36.5% quarter-to-quarter. The average transaction price of residential units went down by 10.3% quarter-to-quarter.

6. Due to the decline in gaming revenue, total government revenue registered a decrease, yet merely resulting in a drop in fiscal surplus. Total government revenue shrank by 4.8% to MOP37.55 billion, with tax revenue from gaming falling by 4.4% to MOP31.92 billion. Total expenditure dropped by 4.4% to MOP17.80 billion on account of a 6.8% decrease in current transfer. Fiscal surplus for the third quarter stood at MOP19.74 billion, down by 5.2% year-on-year and 22.1% quarter-to-quarter.

II. Major Segments of the Economy

Note: Unless otherwise specified, the rates of change refer to year-on-year change in nominal terms.

A. External Merchandise Trade Overview

External merchandise trade sustained growth, with the total trade value rising by 8.9%

to MOP24.37 billion in the third quarter of 2014. Merchandise imports increased by 9.2%

to MOP22.10 billion, and merchandise exports rose by 6.3% to MOP2.27 billion. The exports-imports ratio decreased by 0.3 percentage points year-on-year to 10.3%.

Merchandise trade deficit widened from MOP18.11 billion in the third quarter of 2013 to MOP19.83 billion.

Total Exports

In the third quarter of 2014, value of merchandise exports increased by 6.3%

year-on-year to MOP2.27 billion on account of increase in re-exports and domestic exports.

Analysed by destination, value of merchandise exports to Japan (MOP43.0 million)

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and Hong Kong (MOP1.24 billion) increased by 31.1% and 20.1% respectively; meanwhile, exports to Vietnam (MOP2.0 million), Taiwan (MOP6.3 million), the USA (MOP79.9 million), Mainland China (MOP418.6 million) and the EU (MOP62.1 million) decreased by 95.3%, 20.7%, 9.9%, 8.5% and 1.2% respectively.

Merchandise exports (Year-on-year change)

-50 -40 -30 -20 -10 0 10 20 30

Q3 Q4 Q1 Q2 Q3

2013 2014

%

Total exports USA EU

As the major merchandise of exports, value of machines, apparatus & parts (MOP366.5 million) increased by 62.4% to take up 16.1% of the total exports. Besides, exports of tobacco & wine, other products, copper & articles thereof and clocks & watches increased by 26.0%, 13.3%, 9.0% and 5.7% respectively; on the contrary, exports of diamond & diamond jewellery, electronic components and garment & textile products dropped by 59.0%, 38.2% and 1.7% respectively.

Domestic Exports

Domestic exports amounted to MOP516.3 million (22.7% of total exports) in the third quarter, up by 5.5% year-on-year and 1.3% quarter-to-quarter. Hong Kong continued to be the largest market of Macao’s domestic exports (43.3% of total domestic exports), and the value of exports increased by 21.7% year-on-year; meanwhile, domestic exports to the USA and the EU declined by 10.8% and 8.7% respectively. Analysed by principal commodity, exports of garment (12.3% of total domestic exports) decreased further by 40.2%, of which exports to the USA (39.0% of total domestic exports of garment) fell sharply by 39.3% and exports to the EU (36.3%) dropped by 33.3%; meanwhile, exports of tobacco & wine (27.0% of total domestic exports) increased by 15.6% and that of other products (60.7%) rose by 19.3%.

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Domestic exports to Mainland China increased by 16.6% to MOP69.6 million (13.5%

of total), of which tariff-free merchandise exports under the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) decreased by 27.9% to MOP14.4 million, consisting mainly of copper-clad boards (60.0% of total) and stamps (17.9%); the amount of tariff saved totalled MOP976 thousand.

In addition, results of the Industrial Exports Survey for the third quarter of 2014 indicated that the average length of time of orders on hand of the interviewed manufacturers stood at 2.5 months, up by 47.1% from 1.7 months in the same quarter of 2013. Meanwhile, 29.3% of the enterprises expressed optimism about the domestic industrial exports in the coming six months, up by 8.7 percentage points quarter-to-quarter and 4.4 percentage points year-on-year, with 0.5% anticipating a substantial increase and 28.8% expecting a modest rise. However, 21.0% expected less promising prospects of exports, up by 1.6 percentage points quarter-to-quarter but down by 14.7 percentage points year-on-year; moreover, 49.8% expected the outlook of exports remained stagnant, down by 10.2 percentage points quarter-to-quarter but up by 10.4 percentage points year-on-year. The findings showed that the manufacturers were generally cautious about the outlook of exports.

Re-exports

Total value of re-exports rose by 6.5% to MOP1.76 billion (77.3% of total exports) in the third quarter of 2014. Hong Kong was the largest market of Macao’s re-exports (58.0%

of total), which was followed by Mainland China (19.9%). Value of re-exports to Hong Kong increased by 19.7%, while that to Mainland China decreased by 12.3%. In terms of the types of merchandise, re-exports of consumer goods (37.1% of total) and other products (55.4%) increased by 13.6% and 5.7% respectively, whereas re-exports of raw materials & semi-manufactures (7.6%) declined by 14.4%.

Imports

Value of merchandise imports increased by 9.2% year-on-year to MOP22.10 billion in the third quarter. Mainland China continued to be the main supplier of goods imported to Macao and the value of imports rose by 10.0% to MOP7.24 billion (32.8% of total). Value of imports from the USA (6.0%), the EU (25.1%), Japan (6.1%), Taiwan (1.5%) and Switzerland (9.1%) expanded by 32.5%, 18.5%, 16.2%, 15.7% and 9.5% respectively;

however, value of imports from Hong Kong (9.4%) decreased by 22.7%.

Regarding the types of merchandise, imports of raw materials & semi-manufactures (10.5% of total), capital goods (16.3%) and consumer goods (63.3%) increased by 21.1%,

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20.1% and 6.1% respectively, and imports of fuels & lubricants (10.0%) also increased by 2.0%.

Growth rate of consumer goods, which accounted for the largest proportion (63.3%) of imports, eased further from 20.0% in the first quarter and 8.4% in the second quarter to 6.1% in the third quarter, of which imports of food & beverages (13.7%), clothing &

footwear (7.5%) and light passenger cars & motorcycles (4.2%) maintained growth, rising by 25.9%, 23.3% and 11.3% respectively; however, growth in imports of watches (9.2% of total imports) decelerated from 79.7% in the first quarter and 31.3% in the second quarter to 20.7% in the third quarter; imports of gold jewellery (10.3%) even declined by 23.1% in the third quarter, reversing the increase of 56.2% in the first quarter and 10.8% in the second quarter.

Merchandise imports and the main components (Year-on-year change)

-10 0 10 20 30 40

Q3 Q4 Q1 Q2 Q3

2013 2014

%

Total imports Consumer goods

Capital goods Raw materials and semi-manufactures

B. Tourism, Gaming and MICE

The gaming sector continued to undergo adjustment, with exports of gaming services decreasing by 12.3% in real terms. Sustained growth in visitor arrivals drove total spending of visitors up by 4.6%; nevertheless, after adjusting for tourist price increase, exports of other tourism services edged down by 0.7% in real terms. In addition, exports of both gaming services and other tourism services registered decline, causing total exports of services to drop by 9.9%. Meanwhile, number of MICE events increased by 6.2%

year-on-year, and the number of participants and attendees rose by 16.0%.

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Gaming

Gross gaming revenue amounted to MOP83.14 billion in the third quarter of 2014, down by 7.0% year-on-year. Gross revenue of game of chance decreased by 7.1% to MOP82.86 billion (99.7% of total). The mass market fared well; however, VIP Baccarat revenue declined by 19.1%, with its share in gross revenue of game of chance dropping further to 56%. Gross revenue of pari-mutuels and lotteries grew by 10.0% to MOP287.8 million.

Number of casinos remained unchanged at 35 in the third quarter, with 5,697 gaming tables, down by 0.9%. Number of slot machines continued to decrease, down by 14.8% to 12,584.

Gross gaming revenue

0 30 60 90 120

Q3 Q4 Q1 Q2 Q3

2013 2014 Billion MOP

-10 -5 0 5 10 15 20 25

%

Gross gaming revenue Year-on-year change

Visitor Arrivals

Without being affected by the adjustment of the gaming sector, visitor arrivals increased by 6.1% to 8,245,162 in the third quarter, attributable to the rise in visitors from Mainland China at 5,598,582, with 2,588,005 travelling to Macao under the Individual Visit Scheme (IVS), up by 16.9%. Visitors from Japan, the Republic of Korea, Singapore, the United Kingdom, Australia and the USA registered year-on-year increase, whereas those from Malaysia, Taiwan and Hong Kong decreased. Average length of stay of visitors was 1.0 day, same as that in the third quarter of 2013. Same-day visitors accounted for 52.8%

of the total, down slightly by 0.9 percentage points quarter-to-quarter. Visitor arrivals in package tour increased by 25.3% to 3,478,919.

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Principal visitor markets

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Q3 Q4 Q1 Q2 Q3

2013 2014 Million

Mainland China Hong Kong Taiwan Republic of Korea

Hotels

Hotels and guesthouses had 27,914 available guest rooms in the third quarter, an increase of 0.4%; five-star hotels accounted for 65.9% of the total supply. Number of guests checking into hotels and guesthouses edged down by 0.3% to 2,751,898, constituting 66.2% of the total overnight visitors. Despite a slight decrease in number of guests, the average occupancy rate of hotels and guesthouses increased by 1.3 percentage points year-on-year to 87.1%. Furthermore, the average length of stay of guests held stable at 1.4 nights, with those of the five-star hotels staying the longest at 1.5 nights.

Visitor Spending

Total spending of visitors amounted to MOP15.49 billion in the third quarter, up by 4.6% from MOP14.80 billion in the same quarter of 2013, yet the rate of growth was lower than those in the preceding four quarters. Per-capita spending of overnight visitors increased by 4.1% to MOP3,310, but that of same-day visitors decreased by 7.9% to MOP599.

Per-capita spending of visitors decreased by 1.4% to MOP1,878, the first negative quarterly growth in five years. Mainland visitors spent an average of MOP2,220, down by 4.4%, with those travelling under IVS spending MOP2,758; per-capita spending of visitors from Japan registered the highest growth of 12.2%, at MOP1,954, while that of visitors from Singapore, Taiwan and Hong Kong amounted to MOP1,927, MOP1,653 and MOP919 respectively. Visitors from the United Kingdom had relatively high per-capita

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spending among the long-haul visitors, at MOP1,563.

Analysed by expenditure structure, visitors spent mainly on Shopping (49%), Accommodation (26%) and Food & Beverage (18%). Structure of shopping spending showed significant changes, in which the share of Jewellery & Watches increased from 18% in the second quarter to 26% in the third quarter, while that of Clothing, Handbags &

Shoes and Cosmetics & Perfume decreased from 20%, 19% and 14% to 14%, 18% and 12% respectively.

Per-capita spending of visitors from selected markets

0 500 1 000 1 500 2 000 2 500 3 000

Q3 Q4 Q1 Q2 Q3

2013 2014 MOP

Mainland China Hong Kong Taiwan Singapore Japan

MICE (Meetings, Incentives, Conventions and Exhibitions)

A total of 240 MICE events were held in the third quarter, up by 14 year-on-year;

number of participants and attendees increased by 16.0% to 724,800 due to a 17.2% rise in exhibition attendees, at 695,456. Meanwhile, 214 meetings and conferences were held, drawing 29,344 participants.

C. Consumption and Prices Private Consumption

Private consumption expenditure expanded by 7.2% in real terms, higher than the 7.0% rise in the second quarter of 2014. Household final consumption expenditure in the domestic market increased by 6.7% and that abroad went up by 10.6%.

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Retail Sales

Value of retail sales amounted to MOP15.82 billion in the third quarter, down by 1.4%

year-on-year and 3.4% quarter-to-quarter. Value of retail sales of Watches, clocks &

jewellery (26.0% of total), Leather goods (9.4%) and Adults’ clothing (8.9%) decreased by 15.4%, 12.2% and 1.3% respectively year-on-year, while that of Goods in department stores (17.4%) increased by 11.4%.

After removing the effect of prices, volume of retail sales decreased by 1.7%

year-on-year in the third quarter, with marked decrease being observed in the sales volume of Watches, clocks & jewellery (-14.3%), Leather goods (-13.8%) and Motor vehicles (-12.9%). Volume of retail sales decreased by 2.8% quarter-to-quarter, of which sales volume of Motor vehicles (-17.7%), Adults’ clothing (-14.3%) and Leather goods (-10.5%) fell notably, but that of Automotive fuels and Communication equipment went up by 12.9% and 9.1% respectively.

Value of selected retail sales

0 1000 2000 3000 4000 5000 6000

Q3 Q4 Q1 Q2 Q3

2013 2014 MOP million

Adults' clothing Motor vehicles

Leather goods Goods in department stores Watches, clocks & jewellery

Prices

The average Composite CPI rose by 5.9% year-on-year in the third quarter. Despite a slower growth, inflationary pressures remained. Notable increase was observed in the price indices of Housing & fuels (+11.9%), Food & non-alcoholic beverages (+5.8%) and Recreation and culture (+4.5%); meanwhile, index of Communication continued to fall, but at a slower pace. In addition, implicit deflator of GDP that measures changes in overall prices rose by 8.9% year-on-year.

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Composite CPI and Implicit Deflator of GDP (Year-on-year change)

0 1 2 3 4 5 6 7 8 9 10

Q3 Q4 Q1 Q2 Q3

2013 2014

%

Composite CPI Implicit Deflator of GDP

D. Employment

Strong demand for manpower drove up employment, non-resident workers and employment earnings. Economically active population (labour force) totalled 399,000 in the third quarter, with an employed population of 392,000, up by 7.4% and 7.6% respectively year-on-year. Employment in Recreational, Cultural, Gaming & Other Services reached 92,000, of which 81,000 were working in the Gaming Sector, accounting for 20.8% of the total; employment in Construction and Transport, Storage and Communications saw notable growth, at 46.8% and 25.9% respectively. Non-resident workers rose by 24.5%

year-on-year to 162,877 at the end of the third quarter, with 26.2% working in Construction and 25.4% in Hotels & Restaurants.

Job market remained stable. The unemployment rate stayed at 1.7%, down by 0.2 percentage points year-on-year and held stable as the previous quarter; the underemployment rate was 0.3%. Total number of unemployed was about 6,600, with 26.6% being fresh labour force entrants searching for their first job. Analysed by the previous industry engaged, 31.5% had worked in Recreational, Cultural, Gaming & Other Services and 14.6% in Construction. In terms of educational attainment, 39.6% had tertiary education; 23.6% had junior secondary education and 20.9% had senior secondary education.

Median monthly employment earnings of the employed stood at MOP13,000 in the third quarter, up by 8.3% year-on-year but stayed unchanged from the previous quarter.

Median earnings of the employed residents increased by 4.0% quarter-to-quarter, at MOP15,600. Analysed by industry, median employment earnings in Real Estate and

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Business Activities logged the highest year-on-year increase of 25.0%. For the Gaming Sector that accounted for the largest share of total employment, median employment earnings increased by 9.7% year-on-year.

Employed population and unemployment rate

360 370 380 390 400

Q3 Q4 Q1 Q2 Q3

2013 2014 Thousand persons

1.6 1.7 1.8 1.9 2.0

%

Employed population Unemployment rate

E. Investment

Investment in Construction and Equipment

In the third quarter of 2014, construction and equipment investment increased by 41.2% and 21.4% year-on-year in real terms, causing overall investment to expand by 38.1%. Investment by the private sector and the public sector grew by 41.5% and 5.0%

respectively.

For the investment by the private sector, number of construction of new buildings, units and gross floor area decreased significantly by 14.8%, 79.3% and 68.8% respectively in the third quarter; meanwhile, number of building completions and area increased by 33.3% and 27.6% respectively. Due to the commencement of construction for large-scale tourism and entertainment facilities, together with increase in building construction investment and real estate developers’ margin, construction investment by the private sector expanded by 43.8% in real terms in the third quarter; meanwhile, equipment investment also increased by 28.9% in real terms.

As regards investment by the public sector, construction investment increased by 15.0% but equipment investment decreased by 34.7% in the third quarter.

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Gross floor area of buildings started and completed

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800

Q3 Q4 Q1 Q2 Q3

2013 2014 Thousand m²

Buildings started Buildings completed

Transactions on Real Estate

Property transactions dropped substantially compared with the second quarter of 2014. Number of building units purchased and sold in the third quarter decreased by 26.2% quarter-to-quarter to 3,070; total value amounted to MOP18.39 billion, down by 36.5% quarter-to-quarter.

A total of 1,769 residential units (comprising 253 pre-sale units and 1,516 existing units) were purchased and sold at MOP11.42 billion in the third quarter, accounting for 57.6% and 62.1% of the respective total.

As regards status of the buyers, 2,845 units (92.7% of total) were purchased by Macao residents; value of transaction amounted to MOP16.82 billion, with its share in total value going down from 92.0% in the previous quarter to 91.4%. Meanwhile, 203 units were purchased by non-residents, and the value amounted to MOP1.31 billion.

The average transaction price of residential units decreased by 10.3%

quarter-to-quarter to MOP100,024 per square metre of usable area in the third quarter.

The average price of those in the Macao Peninsula decreased by 16.3% quarter-to-quarter to MOP93,759 per square metre, and the average price of those in Taipa went up by 4.2%

to MOP110,076 per square metre. The average price of office units increased by 10.7%

quarter-to-quarter to MOP132,380 per square metre. The average price of industrial units rose by 3.2% quarter-to-quarter to MOP60,407 per square metre.

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Total number and value of building units purchased and sold

0 5 10 15 20 25 30 35

Q3 Q4 Q1 Q2 Q3

2013 2014 MOP billion

0 500 1000 1500 2000 2500 3000 3500 4000 4500 Number

Number of building units transacted Value of building units transacted

Business Investment

Number of new incorporations increased by 19.9% to 1,375 in the third quarter of 2014; total value of registered capital soared by 55.6% to MOP201.1 million. Among the new incorporations, 32.5% were operating in Wholesale & Retail Trade, 18.8% in Business Services and 15.9% in Construction. In terms of registered capital, Business Services predominated with 40.4% of the total, while Wholesale & Retail Trade and Transport, Storage and Communications accounted for 17.4% and 14.6% respectively. As regards origin of capital, capital from Macao shared 69.4% of the total at MOP139.6 million, and that from Mainland China and Hong Kong took up 16.3% and 5.0% respectively.

Number of companies in dissolution was 107 in the third quarter, down by 11.6%

year-on-year, with 39 engaging in Wholesale & Retail Trade (36.4% of total), 20 in Real Estate (18.7%), 19 in Business Services (17.8%) and 17 in Construction (15.9%).

F. Public Accounts

In the third quarter of 2014, total government revenue decreased by 4.8% to MOP37.55 billion owing to a decrease in direct taxes, of which tax revenue from gaming declined by 4.4% to MOP31.92 billion.

Meanwhile, total government expenditure decreased by 4.4% to MOP17.80 billion, on account of a 6.8% decrease in current transfer. Fiscal surplus stood at MOP19.74 billion in the third quarter, lower than the MOP20.83 billion surplus in the same quarter of 2013.

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Total government revenue and expenditure

0 5 10 15 20 25 30 35 40 45

Q3 Q4 Q1 Q2 Q3

2013 2014 MOP billion

Total revenue Total expenditure Fiscal surplus

G. Money and Finance

At the end of September 2014, narrow money supply M1 went up by 8.8%

year-on-year, of which currency in circulation increased by 16.4% and demand deposits rose by 7.4%. Meanwhile, broad money supply M2 (including M1 and quasi-monetary liabilities) swelled by 14.2%. In terms of currency structure, the share of the Macao pataca (MOP) in M1 increased by 4.7 percentage points to 49.0%, and its share in M2 rose by 0.9 percentage points to 25.2%. The share of the Hong Kong dollar was 48.6% in M1 and 49.5% in M2.

Resident deposits rose by 14.2% year-on-year to MOP477.28 billion, of which deposits in the MOP, the Hong Kong dollar and other foreign currencies grew by 18.5%, 5.9% and 29.8% respectively to MOP112.68 billion, MOP241.37 billion and MOP123.23 billion. Meanwhile, public sector deposits with the banking sector increased by 37.7% to MOP88.05 billion.

Domestic loans extended to the private sector rose by 35.2% year-on-year to MOP328.91 billion, of which outstanding value of mortgage loans extended to residents went up by 33.6% year-on-year to MOP243.15 billion. Within domestic loans to the private sector, the MOP accounted for 27.7%, valued at MOP91.06 billion, and the Hong Kong dollar took up 63.8%, valued at MOP209.70 billion.

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Resident deposits and loans

0 100 200 300 400 500

Q3 Q4 Q1 Q2 Q3

2013 2014 MOP billion (value at

the end of the period)

Resident deposits Mortgage loans to residents Other loans to the private sector

The loan-to-deposit ratio for the resident sector was 58.2%, up by 7.7 percentage points from a year earlier, while that for both the resident and non-resident sectors increased by 6.3 percentage points to 84.4%.

As the MOP is indirectly pegged to the US dollar, interest rates in Macao are normally adjusted to be in line with those in the US. In the third quarter, the US Federal Reserve maintained the range for the Fed funds rate at 0% to 0.25%. Meanwhile, Macao’s savings deposit rate was held stable at 0.01%.

Changes in the exchange rates of the MOP basically reflect changes in those of the US dollar. In the third quarter of 2014, bilateral exchange rates of the MOP against major currencies exhibited a mixed performance. The average exchange rates of the MOP against the Korean won, the British pound and the New Zealand dollar decreased year-on-year by 8.0%, 7.9% and 5.8% respectively, whereas the respective rates against the Japanese yen, Canadian dollar and the Chinese renminbi increased by 4.8%, 4.5%

and 0.8%. The effective exchange rate index for the MOP, a gauge of exchange rates of the MOP against currencies of Macao’s major trading partners, dropped by 0.15 points to 97.95.

H. Other Economic Indicators Transport and Communications

In the third quarter of 2014, seaborne containerized cargo (56,584 tonnes) and air cargo (6,645 tonnes) increased by 11.5% and 4.7% respectively, while containerized

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cargo by land (9,459 tonnes) decreased by 9.5%.

As regards local transport, new registration of motor vehicles rose by 7.1% in the third quarter; new registration of motorcycles increased by 19.2% but that of cars decreased by 4.3%. At the end of September 2014, number of licensed motor vehicles increased by 5.4% to 236,334, comprising 113,384 cars and 122,950 motorcycles.

At the end of September, number of Internet subscribers went up by 18.0% to 295,775; mobile phone users increased by 8.3% to 1,686,971; meanwhile, number of fixed telephone lines dropped by 2.9% to 154,696.

Water and Energy Consumption

Consumption of electricity increased by 8.5% to 1.41 billion kWh in the third quarter of 2014, and that of water rose by 7.0% to 22.3 million cubic meters. Consumption of liquid fuel (gasoline, kerosene, gas oil & diesel, and fuel oil) totalled 90.9 million litres;

consumption of liquefied petroleum gas (LPG) dropped by 6.3% to 9,337 tonnes, consumption of natural gas totalled 36.9 million cubic meters.

III. Concluding Remarks

In the third quarter of 2014, the economy of Macao contracted by 2.1% year-on-year in real terms, the first negative quarterly growth in five years, attributable to a substantial decline in exports of services. Despite the economic downswing, economic activities other than the gaming sector were barely affected. Employment situation remained favourable and the government recorded a considerable fiscal surplus.

Looking ahead to the fourth quarter, domestic demand is expected to remain strong;

rising total employment and working income is conducive to a steady growth in private consumption expenditure; private investment is likely to sustain continuous growth upon the construction of major tourism and entertainment facilities, but public investment is expected to drop. As regards external demand, although merchandise exports and visitor arrivals posted increase in October and November, gross gaming revenue decreased by 21.5% year-on-year, thus exports of services is likely to see a substantial decline in the fourth quarter. Taking into consideration these factors, as the economy of Macao is mainly driven by the tourism and gaming industries, the expansion of domestic demand will hardly compensate the decline in exports of services; therefore, economic contraction is expected to worsen in the fourth quarter.

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SYMBOLS AND ABBREVIATIONS

.. Not applicable r Revised figures - Absolute value equals zero

# Confidential data

~ No figure provided

0^# Magnitude less than half of the unit employed p Provisional figures

@ Figures are subject to revision later on

TEU Twenty-foot Equivalent Unit (20 feet × 8 feet × 8 feet)

Note: Due to rounding, total may not correspond to the sum of the partial figures.

Figures are subject to regular revisions when required.

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白頁

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I. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD AND MACAO

1. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (YEAR-ON-YEAR COMPARISON)

%

2013 2013 2014 2014 2014

Q3 Q4 Q1 Q2 Q3

USA

　Gross Domestic Product 1.6 2.3 2.2 2.3 3.1 1.9 2.6^r 2.4

　Exports of goods 15.8 4.4 2.2 2.7 4.0 2.5 3.3 4.2

　Imports of goods 15.4 3.1 -0.4 1.6 1.0 1.9 4.5 3.6

　Consumer Price Index 3.1 2.1 1.5 1.6 1.2 1.4 2.1 1.8

　Unemployment rate 8.9 8.1 7.4 7.3 6.7 6.9 6.1 6.2

Euro area ^a

　Gross Domestic Product 1.6 -0.7 -0.4 -0.3 0.4^r 1.1^r 0.8^r 0.8

　Exports of goods 13.0 7.6 1.0 0.2 1.0^r 1.2 0.7^r 2.9

　Imports of goods 13.3 1.8 -2.9^r -1.6^r -2.1^r 0.1^r 0.1^r 0.1

Germany

　Gross Domestic Product 3.6 0.4 0.1 0.8 1.0 2.6^r 1.0^r 1.2

　Exports of goods 11.5 3.3 -0.2 -0.9^r 1.7^r 2.9^r 1.8^r 5.7

　Imports of goods 13.2 0.4 -0.9^r -0.5 0.1^r 3.8^r 0.7^r 2.3

French

　Gross Domestic Product 2.1 0.4 0.4 0.3 0.8 0.8 -^r 0.4

　Exports of goods 9.2^r 3.9 -1.5^r -2.3^r -1.9^r 0.4 -1.5^r -0.8

　Imports of goods 13.1 1.9^r -2.3 -1.9^r -1.5 -0.9 -1.7^r -0.8

United Kingdom

　Gross Domestic Product 1.6^r 0.7^r 1.7 1.7^r 2.7 2.9^r 3.2 3.0

　Exports of goods 14.2^r -1.3^r 0.5^r -0.4 -1.0^r -4.9^r -10.9^r -7.2 　Imports of goods 10.2^r 2.1^r 0.7^r 2.6^r -0.3^r -3.3^r -6.1^r -5.9

　Unemployment rate 8.1 8.0^r 7.6 7.6 7.2 6.8 6.3^r 6.0

a Consists 18 member states since 2014.

Source : U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Bureau of Labor Statistics Eurostat

Federal Statistical Office of Germany

National Institute of Statistics and Economic Studies of France; French Customs Office for National Statistics of United Kingdom

2011 2012 2013

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1. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (YEAR-ON-YEAR COMPARISON) (Cont'd)

%

2013 2013 2014 2014 2014

Q3 Q4 Q1 Q2 Q3

Mainland China

　Gross Domestic Product 9.2 7.8 7.7 7.8 7.7 7.4 7.5 7.3

　Exports of goods 20.3 7.9 7.8 3.8 7.3 -3.5^r 5.0 13.0

　Imports of goods 25.0 4.3 7.3 8.5 7.2 1.6 1.5 1.1

　Consumer Price Index ^a 5.4 2.6 2.6 2.5 2.6 2.3 2.3 2.1

Hong Kong

　Gross Domestic Product 4.9 1.5 2.9 3.0 2.9 2.6 1.8 2.7

　Exports of goods 10.1 2.9 3.6 3.3 4.8 0.7 4.8 5.8

　Imports of goods 11.9 3.9 3.8 2.6 4.3 2.1 4.5 5.7

Taiwan

　Gross Domestic Product 3.8^r 2.1^r 2.2^r 1.5^r 3.4^r 3.4^r 3.9^r 3.6

　Exports of goods 12.3 -2.3 1.4 -0.8 1.8 1.0 2.9 6.7

　Imports of goods 12.0 -3.9 -0.2 -3.4 2.1 -1.6 3.8 7.7

　Consumer Price Index 1.4 1.9 0.8 - 0.6 0.8 1.6 1.5

Japan

　Gross Domestic Product -0.5 1.5 1.5 2.3 2.5 2.9^r -0.2^r -1.2

　Exports of goods -2.7 -2.7 9.5 12.7 17.4 6.6 0.1 3.2

　Imports of goods 12.1 3.8 14.9 17.5 24.1 17.6 2.7^r 2.4

　Consumer Price Index -0.3 - 0.3 0.9 1.4 1.5 3.6 3.3

Republic of Korea

　Exports of goods 19.0 -1.3 2.1 2.8 4.7 1.7 3.2^r 3.9

　Imports of goods 23.3 -0.9 -0.8 0.3 2.5 2.0 3.2 5.6

Singapore

　Exports of goods 7.5 -0.9 0.6 5.8 6.0 7.4^r 2.7 -1.4

　Imports of goods 8.6 3.2 -1.6 5.9 1.4 6.8 3.0 -5.7

a Accumulated year-on-year comparison.

Source : China National Bureau of Statistics

Hong Kong SAR Census and Statistics Department

Directorate-General of Budget, Accounting and Statistics, Executive Yuan, Taiwan; Ministry of Economic Affairs, Taiwan Economic and Social Research Institute of Japan; Ministry of Finance of Japan; Statistics Bureau of Japan

National Statistics Office of Republic of Korea; Bank of Korea The Singapore Department of Statistics

2011 2012 2013

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2. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (QUARTER-TO-QUARTER COMPARISON)

%

2013 2013 2014 2014 2014

Q3 Q4 Q1 Q2 Q3

USA

　Gross Domestic Product 1.6 2.3 2.2 4.5 3.5 -2.1 4.6^r 3.9

　Exports of goods 15.8 4.4 2.2 0.5 2.4 -1.8 2.1 1.5

　Imports of goods 15.4 3.1 -0.4 0.6 - 0.9 2.9 -0.3

　Unemployment rate^a 8.9 8.1 7.4 7.2 7.0 6.7 6.2 6.1

Japan

　Gross Domestic Product -0.5 1.5 1.5 0.6^r -0.4^r 1.6^r -1.9^r -0.4

　Exports of goods -2.7 -3.0 9.6 1.4^r 1.4^r -1.4^r -0.8^r 4.0

　Imports of goods 12.3 3.3 15.2 4.9 4.9^r 2.2 -8.2^r 4.4

　Consumer Price Index -0.3 - 0.3 0.7 0.5 0.1 2.3 0.5

Hong Kong

　Gross Domestic Product 4.9 1.5 2.9 0.8 0.9 0.3 -0.1 1.7

　Exports of goods 10.1 2.9 3.6 2.2 3.6 -4.9 3.7 2.6

　Imports of goods 11.9 3.9 3.8 1.9 3.6 -3.2 1.6 2.3

　Consumer Price Index 5.3 4.1 4.3 -0.8 2.7 1.0 0.7 0.4

a After seasonal adjustment.

Source : U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Bureau of Labor Statistics

Economic and Social Research Institute of Japan; Ministry of Finance of Japan; Statistics Bureau of Japan Hong Kong SAR Census and Statistics Department

3. GROSS DOMESTIC PRODUCT OF MACAO

2013 2013 2014 2014 2014

Q3 Q4 Q1 Q2 Q3^@

At current prices:

GDP (Million MOP) 293 745 343 416 413 471 102 746 119 219 115 394 114 967 109 573

GDP per capita ('000 MOP) 534.7 603.5 697.5 .. .. .. .. ..

Chain volume measures in chained (2012) dollars:

GDP (Million MOP) 314 658 313 416 384 242 94 794 107 683 101 928 98 469 92 847

Year-on-Year change in real terms (%)

GDP 21.3 9.1 11.9 11.2 14.3 12.4 8.1 -2.1

Private consumption expenditure 11.0 8.7 6.3 6.4 6.5 4.7 7.0 7.2

In the domestic market 10.6 8.1 6.5 5.9 6.2 4.8 7.3 6.7

Abroad 10.5 12.1 4.9 3.4 8.4 2.3 6.6 10.6

Government final consumption expenditure 5.8 6.2 6.3 6.4 6.1 8.6 4.8 8.1

Gross fixed capital formation 16.9 19.9 4.7 1.4 9.5 30.9 52.7 38.1

Private sector 7.1 9.3 27.3 17.8 58.1 39.8 56.4 41.5

Government 62.1 51.8 -48.1 -55.0 -43.8 -49.2 9.6 5.0

Exports of goods -0.6 30.2 11.4 3.7 15.9 13.4 10.4 11.4

Exports of services 29.5 6.5 12.0 12.2 16.0 11.9 1.3 -9.9

Imports of goods 27.3 12.4 15.1 15.0 22.8 22.1 18.3 12.4

Imports of services 32.2 1.4 0^# 0.6 1.9 3.2 -11.1 -17.8

2013

2011

2011 2012

2012 2013