Cape Town – Economic stress, fuelled by inflation and
unemployment, is rising in the Western Cape.
This caused a decline in the Western Cape economic barometer
for the three months to the end of October.
The three-month Sake24 and BoE Private Clients Western Cape
Barometer was down for the fifth successive month at the end of October,
according to Economists.co.za economist Mike Schüssler, who compiled the
barometer.
This to him indicates the impact of economic stress and a
levelling-off of economic growth.
He said economic stress is rising because of higher
inflation and a slight increase in unemployment. The barometer rose 7.9%
year-on-year (y/y).
Compared with October last year, the transport, financial
(property included) and government sectors again showed the sharpest increase
at 17%, 11% and 12.5% respectively.
Government expenditure in the Western Cape, however,
recorded a three-month decline for the second successive month.
Just as in the other provinces, government expenditure had
helped to carry the economy through the recession, said Schüssler. "But
government cannot continue spending at this rate."
The figures include expenditure by national, regional and
local governments.
Growth in this sector, although still positive, has also
begun to slow down y/y and in October was 12.5%.
The strength of recent expenditure can be seen from the
figure for the three years to end-October. Over this period that of the
government sector swelled almost 34%. (For the other provinces this was also
vigorous: in Gauteng it was up 27%; in the Eastern Cape 32%; in the Free State
37% and in KwaZulu-Natal 17.5%.)
In October, the trade sector rose a sturdy 6.6% y/y.
The other sectors – agriculture (-2.5%), manufacturing
(1.2%), electricity (-1.9%), and construction (-1.9%) – contracted or showed
weak growth.
- Sake24
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