Johannesburg – The Gauteng economy seems to have gone into
hibernation from May.
In the three months to end-May the BoE Private Clients and
Sake24 Gauteng Barometer dipped 2.7%. But it was 4.6% up on the year before.
Mike Schüssler from Economists.co.za, who compiles the
barometer, said he now has no doubt that the Gauteng economy is stagnating.
"There will be growth, but it will be only sufficient
to keep pace with the population increase. No one will become richer or
Schüssler said the mining industry is a particular millstone
around Gauteng's neck.
"Most mines in Gauteng are gold mines and the industry
has been struggling for a long time. This will have a negative impact on the
province's economy for a long time."
In May the barometer's mining index was 12.1% down
year-on-year (y/y) and 20.6% down on three years before.
Schüssler said pressure on the mining sector because of
lower commodity prices is also hurting many Gauteng factories.
The May barometer's manufacturing index was only 0.5% up on
the previous year, pulled down by steel
manufacturing in particular.
"Gauteng's factories are feeling the cold winds blowing
in from the European economy," said Schüssler.
Automobile manufacturers are however doing better because
Gauteng's motor sales remain strong.
In May, vehicle sales in this province were 8.3% firmer than
the year before, despite consumers spending less on durable goods.
But people in Gauteng spent much more in pharmacies and
hardware stores. The latest available figures for April show pharmacy sales
were 7% up y/y, with those of hardware rising 15%.
The barometer's May trade index fell 0.5% on a monthly
basis, but was 6.4% up y/y.
This index is compiled from the latest available figures for
vehicle, petrol, retail and wholesale sales.
Consumers helped the Gauteng construction industry lift its
Schüssler said that in May construction showed a strong
revival and the barometer's construction index rose 10.8%. It was 17.7% up y/y.
This improvement is largely attributable to a 57% increase
in the three-month moving average of the square meterage of non-residential
Schüssler said this figure reflects an increase in retail
space in particular.
He said non-residential construction figures are often
volatile because large buildings are included in the figures only once they are
The barometer’s index for transport, storage and
communications was 11.9% up y/y.
This index is compiled from data on air and overland
transport in Gauteng, as well as the number of cellphone and landline telephone
calls made across the entire country.
Communications still made a positive contribution to the
index, but the number of passengers moving through the OR Tambo airport in May
declined for the first time in eight months.
Schüssler says this decline reflects higher petrol prices,
but also the fact that Europeans now have less money to spend on holidays.
The barometer’s index measuring economic stress in the
Gauteng economy rose 0.4% in May, but it was 2.2% down on the year before.
Economic pressure is calculated based on unemployment and
The May Gauteng unemployment rate slipped to 26.6% and
inflation was 5.5% lower than South Africa’s general inflation rate.
For more business news in Afrikaans, go to Sake24.com.
To find out how your province performed, click here.
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