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Cape Town – The overarching economic picture in the Western Cape is positive, with
some of the strongest consumer spending in the country.
Economic growth could well become somewhat arrested in the
course of the year, but it will still be positive, said Economists.co.za economist
Mike Schüssler, who compiles the Sake24 and BoE Private Clients monthly Western
Cape Barometer.
The main index is still positive year-on-year (y/y) with an
increase of 1.8%, 6.1% up on three months ago.
In the latest barometer reading for February the Western
Cape indeed achieved growth in all the underlying indices compared with three
months previously, indicating a stronger trend.
The agricultural, mining and manufacturing indices were
respectively 6.8%, 8.2% and 2.2% firmer than three months before.
The transport and trade indices, as well as that for
finance, property and business services, improved by 9.2%, 4.6% and 3.9%
respectively compared with three months previously.
"The agricultural index made a definite about-turn. The
February fruit sub-index may still be negative y/y, but it's less negative than
it has been for a long time," said Schüssler.
Cheery news from wine sector
The wine sub-index is
positive – 9.3% up – after having long been negative. Furthermore, more fish is
apparently being caught, because the fish index is still rising and it was
11.6% up on February last year. The wheat index has shown growth for six
successive months and is 11.4% stronger.
Schüssler reckoned it seems as though the construction
sector is also getting into gear sooner than expected.
Although still some 30% weaker than three years ago, when it
experienced a boom, it is recovering slowly but surely. He said that although
people are not necessarily buying new houses, they are making additions to or
refurbishing their properties.
Consumers in the Western Cape are, according to Schüssler,
strong. The Western Cape trade index is 7.1% up on the previous year and 8.5%
up on three years before.
The V&A Waterfront sales figures show retail sales are
18% up y/y – much better than the national retail sales figure of 3.9% for
January announced by Statistics South Africa.
Alex Kabalin, head of retail at the V&A Waterfront, said
strong trading is also anticipated this month owing to encouraging feedback
from tourism bodies, as well as growth over the past few months.
Tourism in the Western Cape is particularly strong,
certainly according to the barometer. This supports growth at restaurants and
hotels.
Vehicle sales remain positive, with an increase of 7.5% y/y,
but are down on the double-digit growth experienced last year. This is possibly
the first sign that Western Cape consumers are also spending more cautiously.
The transport index indicates that Cape Town and Mossel Bay
ports handled bigger volumes, but was hamstrung by a downturn at Saldanha.
The communications index, which falls under the transport
index, is considerably stronger countrywide.
"I expect that the Western Cape will remain positive
even though consumers will be under greater pressure owing, inter alia, to
higher fuel and electricity prices.
"This may be a year of slower growth," 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.
