Cape Town – In April the Western Cape again did better than all the other provinces forming part of the Sake24 and BoE Private Clients barometer project.
This is despite the barometer's overall index falling 1.8% compared with the previous year.
From the barometer indices a sudden economic slump seems to have hit the country in April, but the Western Cape is the liveliest of all the provinces. The Western Cape barometer's growth index rose 2.4%.
Economists.co.za economist Mike Schüssler, who compiles the barometer, said poor growth can be expected for the next month or two.
It is clear that consumers and small businesses are feeling the most pain, owing to high inflation and unemployment. The relatively low interest rates are no help, because they are the same as they were last year, said Schüssler.
More are struggling with consumer indebtedness, and the stress index has been rising for seven successive months. In April it was above 4% for the second successive month.
Schüssler reckons the absence of large mining activities in the Western Cape protects it from the economic downturn becoming evident in the other provinces, especially Gauteng and the Free State.
The regional economy focuses more on the services sector and is thus protected from the worst economic effects of a struggling mining industry.
The Western Cape transport sector is affected in that less iron ore is transported on the Sishen-Saldanha line, and less iron ore therefore exported via the Saldanha port.
Schüssler reckons the April holidays may have had an effect on retail as there were fewer days on which to do business.
He stresses the province has not fallen back into recession, but that growth is simply weaker.
The April agricultural index rose 1.2%. A decision was reached with the Western Cape, which has a healthy wine industry, in cooperation with South African Wine Information Systems, to put together wine statistics in a different way so as to give a broad picture of the wine industry.
It is now a weighted basket of figures on wine-grape production, domestic wine sales and wine exports. According to the new figures, activity in the wine industry grew 9.5% in April compared with the year before.
Unemployment is still a cause for concern in the Western Cape. From 21.6% in December it increased to 22.8% in March and 23.2% in April. This naturally had a depressing effect on the province's economy and constributed to the 4.3% stress index rise.
Government expenditure was 3.6% down in April. Schüssler reckons this is an expected trend at the end of the fiscal year.
The May figures will give a better reflection of government expenditure, he believes.
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