Bloemfontein - The economy is losing some of the steam that
it built up in the second half of last year, but there is no question of a recession - rather, just a loss of momentum.
So said Economists.co.za director Mike Schüssler, the
compiler of the Sake24 and BoE Private Clients provincial barometers.
In February the overall index of four of the five provincial
economies being measured rose year-on-year. Gauteng (+10.1%) showed the
strongest growth and the Eastern Cape ( 2.9%) the weakest.
In all of the five provinces strong consumer spending is
still the driver of growth. The appetite for buying could however soon
moderate.
"Consumers are still spending, but one will have to
wait and see what happens with the rising petrol prices, the higher cost of
electricity and water, as well as the introduction of the new toll roads,"
said Schüssler.
By the end of next month he expects consumers to be heavily
impacted by all the financial pressures, and trade indices could then fall.
Communications leads the pack
The top sector is still communications, with countrywide
growth of 22% in the number of cellphone and landline groups, as well as the
amount of data used on the internet.
Another interesting observation is that, contrary to
expectations, the struggling construction index has started to rise over the
past three months. Only in KwaZulu-Natal, where it is 4.6% down on a quarterly
basis, is the construction sector is still struggling.
"The construction sector is known for its rapid
turnaround and I think this index could surprise us with an improvement this
year," said Schüssler.
In February the increase in vehicle sales sank back to
single digits but, as this was contrasted with last years' already high sales,
it is still not a bad sign.
Schüssler also pointed out that the stress index, which
measures how easy or difficult it is to do business in the provinces, is
starting to rise in the Western and Eastern Cape.
Inflation is beginning to play a bigger role and job
creation is becoming more difficult.
"But I do not regard this as the start of a downward
trend – just a loss of momentum," Schüssler said.
"It's important to remember that we are still growing,
albeit at a considerably slower rate than we experienced in the second half of
last year."
- Sake24
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For more news on the Sake24/BoE Private Clients barometers,
go to www.fin24.com/barometer.