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This is evident from the July Sake24 and BoE Private Clients
KwaZulu-Natal Barometer.
In July this overall index was however 9.6% up on a year ago
at 117.5 index points. But if one looks at the quarterly figures, the picture
starts to change. The overall index is 2.2% down and seven of the nine economic
sectors are performing worse than they did three months ago.
Economists.co.za economist and compiler of the KwaZulu-Natal Barometer Mike Schüssler
says it is still too soon to speak of a second recession, but what is certainly
evident is that economic growth is weaker.
The biggest year-on-year (y/y) decline has been in the agricultural index
(9.2% down), but Schüssler is optimistic that better weather conditions could
again cause the index to rise. Sugar production has indeed lifted 12% y/y.
The manufacturing index has risen only 0.2% y/y and is 2% down in the past quarter. The textile industry's operations are 6% down compared with a year ago, and the sub-index for wood and paper factories 3.5% off.
With such poor growth in its industrial sector the province
cannot create sufficient jobs to lower its unemployment rate, Schüssler warned.
It is currently 20.3%.
The broad trade index, which includes wholesale and retail
trade as well as tourism, is 5% up on a year ago. Sales of durable goods are
however under pressure and vehicle sales fell 22% over this period. The tourism
index rose 7% y/y, but that is low compared with that of the other provinces,
which showed an 11% improvement.
Tourism experts point out that the exceptionally high
tourist numbers during last year's World Cup soccer tournament have distorted
the picture.
In a PwC report on the current state of the hospitality industry,
Dr Nikki Forster said that it could take three to five years to fully exploit
the additional hotel rooms built for the tournament, and that 2011 would be a
difficult year for the industry.
"We predict that expenditure on hotel accommodation will
fall 7.9% this year, but the market should recover in line with global growth
in travelling and tourism."
The financial, property and business services sector was
0.6% down in July compared with a year ago. The past quarter also saw a 6.3%
contraction.
The province's spending on advertising declined 8.6%, but
the property sector, it seems, is beginning to recover lost ground. Property
transfers were 7.6% up on last year and 16% more home loans were granted.
The transport index is still performing well and is 16.2% up
y/y.
But in the past three months it has started to taper off and
the quantity of freight being handled by ports increased by only 3% - far less
than the 12.8% in December.
Schüssler believes declines in sectors like transport, trade and financial and business services are temporary and that better growth lies ahead.
For business news in Afrikaans, go to Sake24.com.
For more news on the Sake24/BoE Private Clients barometers, go to www.fin24.com/barometer.
