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Bloemfontein - The South African economy seems to be getting back on track.
This is according to Economists.co.za director Mike Schüssler, compiler of the Sake24 and BoE Private Clients' Provincial Barometers.
These indices are compiled from dozens of data series and measure the economic pulse of five of South Africa's provinces.
In February this year all five of these provinces' overall indices had double-digit rises. The last time similar heights were reached was in the first half of 2006.
The biggest uptick was in the Eastern Cape (15.7%), followed by KwaZulu-Natal (14.8%). Gauteng and the Western Cape improved 12.4%, while economic activity in the Free State was 10.4% up.
Schüssler pointed to good performance across a broad front.
He said strong growth could be seen in government spending, transport, commerce, and financial, property and business services. These sectors are now moving out of recovery into a subsequent growth phase.
At the same time he warned that the exceptionally high spending by government is not sustainable over the long term. In February the indices that measure activity in the government and communications sectors ranged from Gauteng's 20.9% rise to a strong 39.3% in KwaZulu-Natal.
If government expenditure climbs too quickly for too long, we are heading for higher taxation, he said.
He was more positive about the strong 24.1% growth in the national communications index.
The data revolution brought about by increased competition and cheaper access to the internet will persist for the foreseeable future, he said.
Schüssler pointed out that the communications boom is largely thanks to the internet.
Fixed-line telephone calls are on the decline and there are indications that the cellphone market is close to saturation point, showing growth of only 4%. In contrast, internet web page prints are up to 46% higher.
The provincial barometers also clearly show that the wheels of the country's transport industry are speeding up. There have been double-digit rises in all five provinces' transport industries, with the Eastern Cape (18.4%) in the lead.
This increase should be seen in the light of higher global demand for commodities, said Schüssler. South Africa’s coal, iron ore, platinum and even its agricultural products are in demand and being transported in larger quantities by road or rail to ports or neighbouring countries.
Good vehicle sales in all five provinces helped all trade indices to perform better, with Gauteng (8.4% up) performing best and the Free State (5.8%) worst.
But consumers will have to steel themselves for higher electricity tariffs, further fuel price hikes, new toll tariffs and a possible interest rate rise towards the end of the year, Schüssler warned.
- Sake24
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.
This is according to Economists.co.za director Mike Schüssler, compiler of the Sake24 and BoE Private Clients' Provincial Barometers.
These indices are compiled from dozens of data series and measure the economic pulse of five of South Africa's provinces.
In February this year all five of these provinces' overall indices had double-digit rises. The last time similar heights were reached was in the first half of 2006.
The biggest uptick was in the Eastern Cape (15.7%), followed by KwaZulu-Natal (14.8%). Gauteng and the Western Cape improved 12.4%, while economic activity in the Free State was 10.4% up.
Schüssler pointed to good performance across a broad front.
He said strong growth could be seen in government spending, transport, commerce, and financial, property and business services. These sectors are now moving out of recovery into a subsequent growth phase.
At the same time he warned that the exceptionally high spending by government is not sustainable over the long term. In February the indices that measure activity in the government and communications sectors ranged from Gauteng's 20.9% rise to a strong 39.3% in KwaZulu-Natal.
If government expenditure climbs too quickly for too long, we are heading for higher taxation, he said.
He was more positive about the strong 24.1% growth in the national communications index.
The data revolution brought about by increased competition and cheaper access to the internet will persist for the foreseeable future, he said.
Schüssler pointed out that the communications boom is largely thanks to the internet.
Fixed-line telephone calls are on the decline and there are indications that the cellphone market is close to saturation point, showing growth of only 4%. In contrast, internet web page prints are up to 46% higher.
The provincial barometers also clearly show that the wheels of the country's transport industry are speeding up. There have been double-digit rises in all five provinces' transport industries, with the Eastern Cape (18.4%) in the lead.
This increase should be seen in the light of higher global demand for commodities, said Schüssler. South Africa’s coal, iron ore, platinum and even its agricultural products are in demand and being transported in larger quantities by road or rail to ports or neighbouring countries.
Good vehicle sales in all five provinces helped all trade indices to perform better, with Gauteng (8.4% up) performing best and the Free State (5.8%) worst.
But consumers will have to steel themselves for higher electricity tariffs, further fuel price hikes, new toll tariffs and a possible interest rate rise towards the end of the year, Schüssler warned.
- Sake24
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.
