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Bloemfontein - Free State consumers' appetite for shopping
has been stimulated quite some time before Christmas.
This is evident from the Sake24 and BoE Private Clients Free
State Barometer for October, which shows a couple of healthy rises on the
commercial front.
The other good news is that the shaky construction index
started to lift its head in the past month.
The Free State barometer, compiled by economist Mike
Schüssler, measures the pulse of the province's economic activity in eight
sectors.
The province's overall index for October was 12.9% up on a
year ago and 3.1% up on three months ago. Economic stress factors fell 6.2%
compared with a year ago.
"Business is looking better in sectors like
agriculture, construction and trade, which experienced a small slump in the
second quarter," said Schüssler.
The broad trade index, which includes entertainment and
tourism, is 7.1% better off than a year ago. Retail sales strengthened 5.7%
year-on-year (y/y).
According to Dirk Klopper, director of retail group
Kloppers, furniture, computer equipment and television sets sold particularly
well recently. "There's in fact no division that is currently performing
poorly."
He said that, with the exception of Free State rural areas
which are still under the cosh, most local retailers' sales are now improving.
In October vehicles sales were 30.5% up. This was the 21st
successive month of double-digit rises.
The province's transport and communications index is
experiencing phenomenal growth. In the year to October it was 14.5% up and
31.8% up on three years ago. This was especially driven by a 26.4% y/y rise in
the communications index.
The number of passengers moving through the airport was 5.8%
up on the year before, and land transport increased 6.3% in the period.
"As long as Africa's economies and demand for its
resources are growing, the transport index will remain high – because goods
have to be transported through the harbours to and from neighbouring
countries," said Schüssler.
The construction index is still 23.8% down on last year but
gained traction in the three months to October, rising 0.3%.
Schüssler believes this is the beginning of a more stable
phase, but warns it can still take a while before the recovery gains strength.
"We are still in a hole, but the hole is not being dug deeper."
The financial, property and business services index is 6.5%
up on a year ago. The improvement in the property market is still weak and
property transfers improved only 1.3% y/y.
Asset management is 8.2% stronger, and advertising sales
rose a healthy 34.8% y/y.
The warning lights are however flashing for the mining
sector where, over the past three years, activity has contracted 16.2% despite
a high global gold price and a weakening rand which makes gold production more
profitable.
There has also been a mere 0.2% y/y improvement in the
manufacturing index.
"If the two sectors do not improve to the same extent as the construction and trade sector, this will continue to suppress growth in the province," said Schüssler.
- Sake24
For business news in Afrikaans, go to Sake24.com.
For more news on the Sake24/BoE Private Clients barometers, go to www.fin24.com/barometer.
