Bloemfontein – The KwaZulu-Natal government has started
turning off the taps, but greater private sector expenditure lifted its economy
in October.
The Sake24 and BoE Private Clients KwaZulu-Natal Barometer,
a unique index that measures economic activity in the province, rose 8.1%
year-on-year (y/y) in October. In September it was 7.3% up.
The government index rose only 4.7% y/y, after having shot
up more than 20% earlier in the year.
"The slowdown in government expenditure should be
welcomed because earlier this year it seemed to be reaching excessive
levels," said Economists.co.za economist Mike Schüssler, who compiles the
barometer.
He points out that the money spent by government comes from
taxes and double-digit increases are not affordable in the long run.
The transport index (16.2% up y/y) was the star performer in
October. In the period, nationwide transport rose 6.8% and freight volumes
through the Durban and Richards Bay ports 6.4%.
The countrywide manufacturing sector started to recover, and
KwaZulu-Natal was no exception. In October its index was 1.6% up y/y.
The local motor and component manufacturing industry
improved a phenomenal 50% y/y. Schüssler said the weaker rand certainly
stimulated exports and the end of the strike season also contributed to the
improvement.
The construction sector (4.8% up y/y) is showing signs of
recovery, largely helped along by growth in the property market. Property
transfers advanced 10.6%, home loans 8% and asset management 8.5%.
Advertising sales (20.2% stronger) also showed good improvement.
The trade index (6.3% up) recorded the strongest growth for
the past five months. This was partly stimulated by a 30.4% increase in vehicle
sales.
"An increase in consumer expenditure is important,
especially considering that government expenditure is starting to taper off,
but in the new year consumers can again tighten their belts," said
Schüssler.
- Sake24
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