Bloemfontein – In the past month the global economic
downturn also caused declines and slow growth in the KwaZulu-Natal barometer, which measures changes in the province’s economy.
The overall index improved by 4.1% compared with June 2011.
One should however keep in mind that a wave of strikes and
other negative factors in June last year depressed the index, and this year’s
rise is therefore not necessarily indicative of stronger growth, cautions
Economists.co.za economist Mike Schüssler, who compiles the KwaZulu-Natal barometer.
The manufacturing sector is starting to lose steam, while
the financial, property and business services index has already been in
negative territory for eight months.
It’s noteworthy that the province is now consuming 8.7% less
electricity than in the previous year.
This is partly because Eskom has asked
major customers like the Richards Bay aluminium smelters to save in peak
periods, but also because the general manufacturing sector is contracting, said Schüssler.
The barometer shows that textile and metal factories, in
particular, are currently producing less.
The outperformer in June was the transport and
communications index (12.8% up on the year before), which delivered its
strongest growth for more than a year.
Over the same period the volume of freight handled by the
province’s ports increased by 8.6%, but the number of passengers moving through
the King Shaka Airport was 4.2% down.
Vehicle sales are still experiencing a
run and the index is 15.3% up on a year ago. The general trade index rose 6.7%
year-on-year (y/y), mostly thanks to strong growth in sectors such as hardware.
“There is a clear trend of people now undertaking a lot of
home improvements, but the building projects do not always go through formal
channels and are therefore not reflected in construction data,” said Schüssler.
The financial, property and business services index (4.7%
down) is again disappointing.
The decline is largely owing to another month of
poor advertising sales (27.2% down), while activity in the property market is
also only half what it was in its heyday seven years ago.
Schüssler said lower
interest rates and other supportive factors will probably slowly but surely put
it back on the road to recovery.
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