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Johannesburg - Although its economy felt the effects of the recession, it looks as though KwaZulu-Natal (KZN) may prove to be more resilient than other provinces.
This is the first presentation of results from the new Sake24 and BoE Private Clients' KwaZulu-Natal barometer. The province is SA's second-biggest and represents about 17% of the country's gross domestic product.
The barometer indicates strong growth in the province between 2004 and 2007, but shows it was hard hit by the slump from 2007 to September last year.
Since then, the economy has put up a relatively solid performance, with economic activity levels growing by 7.2% year-on-year or 101 index points in September, up 2.1% from August.
Economists.co.za economist Mike Schüssler said this performance is owing to low stress factors in the province's economy, such as lower inflation and interest rates. Unemployment growth also lagged that of other provinces.
The province's economy benefited from greater government spending and a strong transport sector, according to Schüssler.
Total government spend by the province's provincial and local authorities was 19% higher than a year ago, although capital expenditure dropped by nearly 10%.
The province's transport sector performed well, with road transport showing a 5.5% boost while freight volumes handled by harbours grew by 8.3%.
Air passenger numbers rose by 10%. The new airport seems to be luring more people to the province, and it appears KZN received a bigger boost from the 2010 Fifa World Cup than the other provinces, said Schüssler.
In the last couple of months, manufacturing growth was hard hit by strikes and the strong rand. "Growth will slow down in the next few months and although this is not good news for job creation, I don't expect any significant rise in retrenchments," said Schüssler.
He anticipates the first half of 2011 to show an improvement over the last six months of 2010.
The sector most under strain has been KZN's construction industry. This was mirrored by the economies of several other provinces because big government projects have dried up and building projects in the residential market almost came to a standstill.
Non-residential properties also performed badly, with a 25% drop in projects finished in September compared to the previous year.
Overall, the barometer held out positive prospects for the province, although economic growth will be on the sluggish side.
Apart from the construction sector, Schüssler anticipates continued growth.
- Sake24
This is the first presentation of results from the new Sake24 and BoE Private Clients' KwaZulu-Natal barometer. The province is SA's second-biggest and represents about 17% of the country's gross domestic product.
The barometer indicates strong growth in the province between 2004 and 2007, but shows it was hard hit by the slump from 2007 to September last year.
Since then, the economy has put up a relatively solid performance, with economic activity levels growing by 7.2% year-on-year or 101 index points in September, up 2.1% from August.
Economists.co.za economist Mike Schüssler said this performance is owing to low stress factors in the province's economy, such as lower inflation and interest rates. Unemployment growth also lagged that of other provinces.
The province's economy benefited from greater government spending and a strong transport sector, according to Schüssler.
Total government spend by the province's provincial and local authorities was 19% higher than a year ago, although capital expenditure dropped by nearly 10%.
The province's transport sector performed well, with road transport showing a 5.5% boost while freight volumes handled by harbours grew by 8.3%.
Air passenger numbers rose by 10%. The new airport seems to be luring more people to the province, and it appears KZN received a bigger boost from the 2010 Fifa World Cup than the other provinces, said Schüssler.
In the last couple of months, manufacturing growth was hard hit by strikes and the strong rand. "Growth will slow down in the next few months and although this is not good news for job creation, I don't expect any significant rise in retrenchments," said Schüssler.
He anticipates the first half of 2011 to show an improvement over the last six months of 2010.
The sector most under strain has been KZN's construction industry. This was mirrored by the economies of several other provinces because big government projects have dried up and building projects in the residential market almost came to a standstill.
Non-residential properties also performed badly, with a 25% drop in projects finished in September compared to the previous year.
Overall, the barometer held out positive prospects for the province, although economic growth will be on the sluggish side.
Apart from the construction sector, Schüssler anticipates continued growth.
- Sake24
