Bloemfontein – Many South Africans treated themselves to a
new car in November and December, but used them for fewer trips than expected.
This is one of the trends seen in Sake24 and BoE Private
Clients’ December provincial barometers. Every month this unique series of
statistical indices measures economic activity in five of South Africa's
biggest provinces.
“South Africans appear to prefer buying a new car than a new
house,” says Economists.co.za economist Mike Schüssler, who compiles the
barometers.
In all of the provinces, vehicles sales showed double-digit
rises. This generally underpinned the positive performance of the broad trade
indices (which include tourism and entertainment).
Gauteng (3.1% year on year) had the weakest trade increase
and the Western Cape the strongest (8.7%).
Schüssler says petrol sales and tourism figures were weaker
than expected in the Eastern Cape, the Free State and Gauteng.
Money was also spent on cellphones, the internet and durable
goods like sound equipment.
Cellphone usage increased by 25%, while fixed-line usage
declined 7%. This is attributed to growing competition among telecommunications
companies offering lower rates for data and internet services. Internet usage,
measured from the number of Web page impressions, rose more than 45%.
Property transfers and bond registrations improved
moderately nationally, but still did not approach pre-2009 levels.
“It’s certainly clear that banks are approving more home
loans these days, but we are also seeing that people are more reluctant to
incur debt.”
Schüssler expressed his concern about the effects of the
global economy's current slow growth.
His viewpoint is supported by the Reserve Bank, which last
month lowered its outlook for South Africa's economic growth from 3.2% to 2.8%.
Primary sectors – such as agriculture, where the index for
four provinces dropped an average 6.9% in December, and that of mining (3.1%
down) – are being negatively affected by lower foreign demand for South
Africa's resources and products.
The mining sector is being further hurt by higher
electricity prices as well as agreements with unions that negotiate
above-inflation wage increases.
The barometer shows that government expenditure in the five
provinces began to slow down by year-end. Whereas the beginning of last year
still saw double-digit increases, the average December increase, after
inflation, was only 6%.
Schüssler does not necessarily believe this to be a bad
sign.
“Government realises that it has to have a buffer in case a
slowdown in global economic growth becomes a reality this year.”
- 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.