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Johannesburg - Consumers and businesses will not switch on a light or wall plug unless necessary.
According to Mike Schüssler, an economist at Economists.co.za and the compiler of the Sake24 and BoE Private Clients provincial barometers, that is why electricity consumption and distribution make a good composite indicator of economic activity.
A composite indicator shows how the economy is currently doing. The electricity indices of the provincial barometers are therefore good indicators of how the provinces' economies are currently doing.
In the Eastern Cape and Gauteng, the two provinces that were first to come out of the recession, the electricity indices in January rose year on year.
In the Western Cape and the Free State these indices remained negative year on year, but they are again climbing smartly on a three-month and month-on-month basis.
In January the Eastern Cape and the Gauteng barometers' electricity indices were also higher than 18 months ago, after having reached their lowest points in March and April last year, the trough of the recession.
According to Schüssler, Eskom's tariff increases, which were announced by the National Energy Regulator (Nersa) last week, will not affect these indices as badly as they will affect sectors like manufacturing and retail.
Factories and mines are the largest consumers of electricity and the impact on their prices will start on April 1, he explains. The retail and motor industries will also be affected by the increases in the second half of the year.
Schüssler says although efforts have been made to keep the impact of the more expensive electricity on households as moderate as possible, price increases in the second half of the year will certainly be partly attributable to more expensive power.
Electricity is 70% of the price of gas.
At Spoornet electricity makes up 20% of its costs, and it makes up about 7% of producer prices.
The price of water will also rise, because water has to be pumped by electricity, and prices at personal services like hair salons - which use a great deal of electricity - will go up, Schüssler points out. The second- and third-round impacts of more expensive power will definitely filter through to consumers.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.
