Bloemfontein - The KwaZulu-Natal economy is still growing – but the tempo began to slow down in May compared with previous months, said Mike Schüssler, who compiled the Sake24 and BoE Private Clients KwaZulu-Natal Barometer.
This index measures economic activity across various sectors and in May it rose 11.9% year-on-year (y/y) to 119.4 index points.
Sectors that performed well were transport (18.9% up), government (18% up) and trade (7.7% up). The province’s stress index, which measures how difficult or easy it is to conduct business, is also the lowest of all the provinces, contracting 2.9% in May.
Sectors pausing for breath in May were mining (only 0.3% up), manufacturing (3% up) and the property, financial and business services sector which rose 3.2% y/y.
The tail-enders were the agricultural index (2.6% down) and the province’s construction sector, which was 3.7% weaker than a year ago.
The slight slowdown was to be expected, said Schüssler, and it shows the brisk growth of recent months is not necessarily sustainable, especially in sectors such as government.
He points out that even the trade index, which still performed well, is starting to lose steam. Automobile sales (17.5% up) were, for instance, not as spectacular as the 30.9% rise recorded in January this year.
Sales of durable goods are starting to level off, he said, a sign that the province’s economy may be catching its breath before experiencing another strong period of growth.
The one sector of the KwaZulu-Natal economy Schüssler considers concerning is the property, financial and business services sector, which in May this year was still 18.5% worse than in May 2008, before the recession took hold.
- Sake24
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