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Tourism may aid E Cape economy

Mar 09 2012 07:00 Johan Brits

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Johannesburg – The Eastern Cape may not yet have a regional team to participate in this year's Super Rugby series, but it has an abundance of tourist attractions that can be seriously marketed.

These could give economic growth in the province a massive boost if all those involved in the tourism sector pulled together, says Mike Schüssler, who compiles the Sake24 and BoE Private Clients' Eastern Cape Barometer.

Schüssler, from Economists.co.za, again heavily stressed marketing of the tourism sector.

The Eastern Cape’s overall economy, in his view, has not performed "too badly" but it could have done better.

Although he is not immediately concerned about it, Schüssler said vehicle and component manufacturing has declined somewhat. "For the first time in six months manufacturing has been negative."

Schüssler said despite the fact that the agricultural index is negative year-on-year (y/y), over the past three months it has improved 16% in the wake of the drought. “That is good for the province’s rural economy.”

A major problem that remains is the number of cases of civil indebtedness which has continuously risen over the past seven months. “This could arrest the consumer momentum.”

According to Schüssler, consumer expenditure has for 18 months achieved continuous double-digit growth.

“Retail and wholesale have strengthened somewhat. Petrol sales have tapered off. People are making sure that they save (on fuel), but are still wandering around the shops.”

House sales are also reasonable. Indeed, the housing market has performed well for five successive months. “This will lift the construction industry later.”

Nevertheless house sales are by no means close to those seen three years ago. They have declined 26% over the three years, said Schüssler.

Informal building

In the commercial construction industry little is happening, but considerable "informal" building is taking place. This means residents are adding to their homes – additional rooms or verandas – without submitting plans to the building authorities. This is loosely termed "illegal building", but does not apply to all construction.

Schüssler said together with poor tourism growth, advertising expenditure is falling. Y/y in December tourism figures fell 10% and in January 11%.

According to Schüssler, wine farms in the Western Cape are continually on the market and Durban is regularly advertised, but nothing is heard of places like Port Elizabeth and East London.

“The Eastern Cape may not have a rugby team (in this year's Super Rugby series) to attract people, but there are many other possibilities. Bloemfontein is an example. Its tourist numbers are rising thanks to conferences it presents. The Eastern Cape can do the same.”

Schüssler believed guest house proprietors and others should get together and market the Eastern Cape. His advice is: invite visitors to tourist attractions with special offers.

“This will give the Eastern Cape another leg for growth and to create jobs.”

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