Cape Town - The Western Cape economy is doing extremely well and the recovery in business activities over a broad front was pleasing, said Economists.co.za director Mike Schüssler.
The Sake24 and BoE Private Clients Western Cape Barometer for December reflects annual growth of 8% to 106.4 index points.
All the subsectors of the economy other than the construction sector (which contracted 17.1% to 80 index points) showed year-on-year (y/y) growth, with the barometer’s stress index – a reflection of the pressure experienced by business – recording a drop (down by 1% to 107.1 index points).
According to Schüssler, who compiles and analyses the barometer information for Sake24, it is to be expected that the construction sector will struggle for some time yet as it is a lagging indicator which merely reflects the sharp property market slump during the recession.
The housing market is currently well on the way to recovery, but the growth in the number of new bonds approved and the number of houses sold shows that the market is only making up leeway and not yet showing growth. If the property market had been growing, banks would have declared better dividends, said Schüssler.
The government expenditure index did show y/y growth of 14% to 166.4 index points, but declined (-1.4%) compared with the previous month, and when the past three months (-4.1%) were compared with the previous three months.
But Schüssler was not too concerned about this because he believed that the Western Cape's increase in state expenditure had begun before that of most of the other provinces, and that the rate was not sustainable.
The barometer’s agricultural index was up 5% to 106.5 index points.
The transport index was 7.3% higher at 137.7 points, with freight volumes through the Cape Town, Saldanha and Mossel Bay ports rising by 12.3%, the number of passengers moving through George and Cape Town airports up 3.2%, and land transport increasing 4.3%.
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