Nine of the
12 indices making up the Free State barometer rose year on year. In May this
year - on the eve of the 2010 FIFA World Cup soccer tournament - the province’s
growth index rose 3.6% year on year.
This growth exceeded expectations, said Mike Schüssler, Economists.co.za chief economist and compiler of the Sake24 and BoE Private Clients Free State Barometer.
But he warned that the second half of the year could see a slowdown. Key sectors like manufacturing, electricity, transport and the government index performed well in May. The biggest rise was in the government index, 12.1% up from a year ago.
A turnaround is evident in the financial, property and business services index, which fell only 1.3% year on year in May after having been 7.3% down in April compared with the corresponding period in 2009.
First National Bank regional director for commercial banking services Wayne Kriel said that as far as the direct consumer market is concerned, sales are still under pressure. Although there is increased demand, not all credit or home loan applications are approved.
The run seen in the Free State's construction sector is levelling out, Schüssler warned, and there is still a major decline in the residential building sector. The construction index rose 2.6% year on year, but has fallen back 14.7% over the past three months.
The good news is that motor vehicle sales are going from strength to strength in the Free State and surged 26.3% in May. Car sales and home loans are leading the way in the economic turnaround, said Kriel.
- Sake24.com