Johannesburg – Consumers are still driving the Gauteng economy forward with their shopping carts.
In March, the Sake24 and BoE Private Clients' Gauteng Barometer was 8.3% up on a year ago.
The compiler of the barometer, Mike Schüssler of Economists.co.za, said the Gauteng economy is still being driven forward by commerce and consumer spending.
"The people of Gauteng are still buying as though there were no tomorrow and retail sales are 7.8% up on a year ago."
In March the barometer's trade index, which reflects retail, wholesale and petrol sales, was 7.1% up on a year ago and 9.6% better than three months ago. The barometer's manufacturing index is also gaining ground and is 5.3% up year-on-year (y/y).
Schüssler said these figures indicate consumers are incurring debt, but this does not yet appear to be a problem because civil indebtedness cases are still on the decline.
"Consumers cannot continue in this fashion forever, but for the present it still appears positive."
Schüssler said consumers will probably hold on to their buying power for a few more months as the toll road system will not come into force – for now.
The barometer's economic stress index is 4.3% down on a year ago.
He said low interest rates have certainly helped to stimulate Gauteng consumers' spending spree, but inflation is creeping upward and unemployment remains a problem in the province.
Schüssler said mining is probably the biggest factor restraining growth in Gauteng.
"Mining production is at the lowest levels for the past 51 years and I don't think this will change. Gauteng can no longer rely on mining."
In the three months to end-March the barometer's mining index declined 15.2%, and it is now 11% down y/y.
The construction sector, however, is recovering more rapidly in Gauteng than in other provinces.
The Gauteng barometer's construction index in March was 12.8% up on last year, but still 17.6% down on three years ago.
Schüssler said the improvement is owing to house sales, which have been in positive territory for the past 22 months.
The province's transport index is 4.6% up on a year ago, mainly thanks to overland transport which increased by 15.4%.
The number of passengers moving through the province's airports rose only 2.3%. Schüssler cautioned that this low increase will also affect the province's hospitality industry.
"Although Gauteng's economy is still growing, it could start to languish later this year, as will consumers."
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.