Johannesburg – A perk-up in economic activity in the Eastern
Cape boosted February growth.
This is evident from the latest Sake24 and BoE Private
Clients Barometer for the province.
"I'm happy about the slight revival in the Eastern
Cape, even if it does not last long. The sudden improvement is a very good
thing. Something has happened," said Economists.co.za economist Mike
Schüssler, who compiled the five provincial barometers.
The Eastern Cape barometer's overall index moved into the
red at the end of 2011. Although still negative year-on-year (y/y), the index
firmed 1.2% in the past three months.
Various sectors of the economy have improved markedly in
these three months. The biggest improvement was in construction (17.8% up),
followed by transport (9.2% up) and electricity (8.4% up).
Measured y/y, it's the transport and communications sector
that is still stimulating the local economy. This index was 13.4% up compared
with February last year.
The significant manufacturing sector is still 1.6% down on
the previous year – and did not share the past three months' run.
Construction looking up
Prospects for the embattled construction sector are starting
to look better. Schüssler said building is actively taking place in the Eastern
"The property market was very hurt by the 2008
recession – and we continue to see this. People are not buying houses, but
rather improving their property – here a room and there a stoep."
This type of building is vigorous in the Eastern Cape, said
Schüssler, with increased purchasing from hardware stores. Compared with a year
ago, cement sales in the province are 13.5% up.
Although Eastern Cape consumers are buying
"cautiously", there's a good
move in the broad trade index which includes retail and wholesale, as well as
tourism and entertainment. The index is 5.5% up on the previous year.
Vehicle sales are however starting to decelerate. In
February they were only 5.6% up. This was the first time in 18 months that
sales growth was not in the double digits of a year ago. In November 2011 sales
growth was over 30%.
Although Eastern Cape consumers are being cautious, they
have a little more confidence and are spending their money. While they are not
focusing on buying cars, they are still buying.
Petrol sales are down as people are driving less.
Nevertheless money is being spent on other things, said Schüssler.
The location of the Eastern Cape ports is causing a revival
in the province's transport industry. "People are realising Durban's
harbour is not the only one," said Schüssler.
The amount of freight being handled by the East London and
Port Elizabeth ports has risen 2.8% y/y, while overland transport has increased
by 7.4%. What is concerning, though, is that the number of passengers moving
through the local airports fell 0.2% – negatively affecting the tourism
industry as well.
Schüssler said the tourism market in the Eastern Cape could
do better. He again stresses that the province needs to market itself as a
tourist destination more quickly.
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.