Bakeries, flower and fruit shops complained of falling sales before Tuesday's festival. Sales of mooncakes, which had risen steadily for decades, are way down. ``Yes, people are buying but not as much as last year,'' said a saleswoman at a bakery shop in the Causeway Bay shopping district.

Retailer K S Tang said daily mooncake sales were less than 100,000 Hong Kong dollars (13,920 US dollars) against last year's 200,000 dollars.The multi-million dollar mooncake industry is a victim of falling consumer spending during a time of sharply rising unemployment. It also faces growing competition from mainland China.

The industry expects mooncake sales to drop some 30 per cent this year. ``It is natural with the bad economy,'' said Law Pui-ling, vice-managing director of a leading bakery, Wing Wah. Many bakers have beenforced to cut prices as a result. A box of four ordinary mooncakes now costs slightly less than 100 dollars, compared to around 300 dollars previously.

Bakers who export to Chinese communities worldwide also fear a huge plunge in regional exports although sales to the US and Europe may help compensate.Last year, Hong Kong exported an estimated 600 million Hong Kong dollars worth of mooncakes, up from 510 million dollars in 1996.

The festival, also known as the mid-autumn festival, is also failing to bring much joy for vendors of fruit and flowers which are traditionally in demand as festival gifts.

In the past, gift baskets ordered by companies as presents for clients often contained cognac, champagne, wine, or costly chocolates.``Now there is no such demand. Many companies are also trying to budget,'' said May Ko, a flower-and-fruit shopowner in Wanchai. She estimates that her sales will fall by some 30 per cent.

This year's moon festival, which falls on the 15th day of the eighth lunar month, willbe a somber one for many as Hong Kong grapples with its first slump since 1983.

Unemployment, already at a 15-year high, is expected to go even higher before the end of the year. One in three companies plan to lay off staff in the next few months, a survey showed last week.

The eating of mooncakes commemorates the overthrow of the Mongol Yuan dynasty by China's majority Han in 1360. Before the revolt, the Han distributed mooncakes containing messages detailing preparations for the uprising.

Ever since, the mooncake -- a moist mixture of pastry with a filling of spices, mashed lotus seeds and up to four egg yokes -- is eaten on the night of the festival.

Many firms are turning away from the traditional recipe to attract younger customers. Many mooncakes are now moulded in the shape of cartoon characters like Mickey Mouse and Garfield.

Others have filled their cakes with fruit, chocolate or ice cream.