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Johannesburg – The Gauteng economy is growing strongly, thanks to consumers ringing up the cash registers.
In January the Sake24 and BoE Private Clients' Gauteng Barometer was 11.9% up year-on-year (y/y). Economists.co.za economist Mike Schüssler, who compiled the barometer, said it is currently at its strongest level for the past six years.
“It’s partly owing to growth, but also because economic stress has reduced and jobs have been created.”
Schüssler said Gauteng is experiencing a bigger economic upturn than the other provinces, mainly because of strong consumer expenditure. Consumers in Gauteng spent with gay abandon in December and January. “Rather, the low interest rates are discouraging them from saving.”
In January the barometer’s trade index was 7.6% up y/y. The index is compiled from wholesale, retail, petrol and vehicle sales. In January vehicle sales were 10.5% up on the year before. The rising petrol price, however, held back petrol sales.
The trade index was especially pushed up by retail sales in December, the most recent retail figures available at the time of compiling the barometer. From November to December retail sales climbed 38%, and they were also 8.7% up on the year before.
Schüssler said the revival in consumer spending is also reflected by an increase in advertising.
In January advertisements in Gauteng newspapers and on radio stations were 21.1% more than in the previous year. Advertising forms part of the barometer’s financial services index, which was 3.7% better in January than a year ago.
Unsustainable
But Schüssler said he is worried about the sustainability of the current levels of consumer spending.
“The consumer can carry the economy for around the next six to eight months, but somewhere the more productive side of the economy, like mining and construction, will have to improve.”
in January the manufacturing index was 2.4% up y/y, but the construction index was 7.3% weaker.
Schüssler said the fact that civil claims for indebtedness were down 46% y/y means consumers are still not experiencing much pressure. In January the economic stress index declined 2.9%, and it was 4% less than the year before. The inflation rate for Gauteng stood at 6% in January, but interest rates were still low.
The December and January unemployment rate in Gauteng also remained unchanged at 25%, but new posts were created in the province.
Transport, storage and communications make a big contribution to Gauteng’s growth. In January this index climbed 11.6%, and it was 20% higher than in the previous year.
The countrywide increase in the time consumers spent on the internet and their cellphones supports this index.
Schüssler said an ever-increasing portion of retail sales is now taking place online.
In January the Sake24 and BoE Private Clients' Gauteng Barometer was 11.9% up year-on-year (y/y). Economists.co.za economist Mike Schüssler, who compiled the barometer, said it is currently at its strongest level for the past six years.
“It’s partly owing to growth, but also because economic stress has reduced and jobs have been created.”
Schüssler said Gauteng is experiencing a bigger economic upturn than the other provinces, mainly because of strong consumer expenditure. Consumers in Gauteng spent with gay abandon in December and January. “Rather, the low interest rates are discouraging them from saving.”
In January the barometer’s trade index was 7.6% up y/y. The index is compiled from wholesale, retail, petrol and vehicle sales. In January vehicle sales were 10.5% up on the year before. The rising petrol price, however, held back petrol sales.
The trade index was especially pushed up by retail sales in December, the most recent retail figures available at the time of compiling the barometer. From November to December retail sales climbed 38%, and they were also 8.7% up on the year before.
Schüssler said the revival in consumer spending is also reflected by an increase in advertising.
In January advertisements in Gauteng newspapers and on radio stations were 21.1% more than in the previous year. Advertising forms part of the barometer’s financial services index, which was 3.7% better in January than a year ago.
Unsustainable
But Schüssler said he is worried about the sustainability of the current levels of consumer spending.
“The consumer can carry the economy for around the next six to eight months, but somewhere the more productive side of the economy, like mining and construction, will have to improve.”
in January the manufacturing index was 2.4% up y/y, but the construction index was 7.3% weaker.
Schüssler said the fact that civil claims for indebtedness were down 46% y/y means consumers are still not experiencing much pressure. In January the economic stress index declined 2.9%, and it was 4% less than the year before. The inflation rate for Gauteng stood at 6% in January, but interest rates were still low.
The December and January unemployment rate in Gauteng also remained unchanged at 25%, but new posts were created in the province.
Transport, storage and communications make a big contribution to Gauteng’s growth. In January this index climbed 11.6%, and it was 20% higher than in the previous year.
The countrywide increase in the time consumers spent on the internet and their cellphones supports this index.
Schüssler said an ever-increasing portion of retail sales is now taking place online.
