Capital formation in Hong Kong crept up by a measly 3%

Building and construction are improving.

According to Hang Seng Bank, after registering year-on-year growth of just 3.3% for 2013, capital formation continued on its tepid growth trajectory to increase by 3% in the first three months of this year.

Investment in building and construction showed some signs of improvement, registering growth of 10.2% after bottoming out in 4Q13.

Here’s more from Hang Seng Bank:

Spending on machinery and equipment grew by a meager 1.4% with many businesses holding a ‘wait-and-see’ attitude given the uncertain economic outlook.

Initially more surprising was the news that net exports placed their smallest drag on growth since 2011. However, the strong rebound was due more to import weakness than export strength.

While export growth slowed from 5.5% in 4Q13 to 1% in 1Q14, import growth also eased from 6% to 1.1%.

The softness of trade activities in 1Q14 possibly reflects the impact of severe weather in the US as well as a faster-than-expected deceleration of growth momentum in mainland China’s economy.