Bloemfontein - Thanks to South Africans buying cars,
chatting more on cellphones, surfing the internet and having reduced their
debts over the past year, the South African economy began to turn around in
October after a three-month contraction.
Four of the five provincial economies for which Sake24 and
BoE Private Clients compile barometers strengthened over the past quarter. Only
the Western Cape (2.5% down on three months ago) is still in decline.
All provinces saw their trade indices rising, with Gauteng -
9.4% up year-on-year (y/y) - doing best. This index measures vehicle, petrol,
retail and wholesale sales, as well as tourism.
Vehicle sales remained steady, with the Free State (30.5% up
y/y) performing best.
"The consumer is the harbinger of the economy, but will
also first feel the impact of higher inflation or interest rates," said
Mike Schüssler of Economists.co.za, who compiles the barometers.
In the fourth quarter the manufacturing sector countrywide
began to shake off the negative effects of the strike season, and the healthy
Eastern Cape motor industry's surge turned around seven months of negative
growth.
Schüssler said he is seriously disappointed in the mining
indices, considering how the gold price has strengthened this year.
In Gauteng (11.6% down on a year ago) and the Free State
(10.2% down), in particular, there was a marked decline. Over the past 11 years
mining's contribution to the country's gross domestic product (GDP) has
declined sharply (see graph), and the country has derived little benefit from
the global spike in commodity prices.
"This year saw the highest gold price in history, and
the fact that our mining was unable to adjust to it indicates uncertainty in
the sector," said Schüssler.
Government is also beginning to apply the brakes to its
expenditure across the country, with KwaZulu-Natal (a mere 4.7% up on a year
ago) having recorded the smallest rise in October. In the Free State (15.7% up)
the increase was greatest.
"The fact that government is now spending less than
earlier this year shows that it may have been spending ahead of budget."
The national communications index rose 26.4% in October.
"The cellphone revolution has still not spent itself and its good increase
is a further indication of a consumer-driven economy."
There was a national decline in the number of civil
indebtedness cases, and an increase in asset management activity.
Schüssler said it appears South Africans’ indebtedness has
improved slightly, thanks in particular to the low interest rate. "The
economy, however, remains volatile and we are unlikely to see growth of more
than 2% in the immediate future," he said.
- Sake24
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