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Bloemfontein - “Why do we still feel the recession's impact so strongly, even though the figures show that our provincial economy is doing much better than a year ago?”
That is the question he frequently receives from Free State business people, said Mike Schüssler, the compiler of the Sake24 and BoE Private Clients Free State Barometer, a unique series of statistical indices measuring the pulse of the provincial economy.
The latest Free State barometer, published on Wednesday, shows a 10.6% rise for April this year compared with April last year.
Schüssler said it should be remembered that the recent recession was the worst in our lifetime.
Recovery therefore comes off a very low base. If we compare the figures with those of three years ago, we are only now beginning to make up what we have lost.
Examining the index for financial, property and business services, one can see exactly what he means. In April this year it stood at 112 index points, 12.1% up on a year ago. But three years ago the index was at 121 points; the sector is therefore still 11.8% weaker than before the recession.
Since its high in December 2006, the Free State housing market has lost up to three-quarters of its turnover, and estate agents are still struggling to survive, said Schüssler.
The best performing indices for April were transport (188 points and 17.8% up year-on-year) and government expenditure (177 points and 15.1% up).
Free State provincial government chief economist Itumeleng Moses said like Schüssler, he is pretty worried about the sustainability of high government spending.
It's not ideal, he said, for the government to be one of the biggest employers in the province, contributing 28.9% to the gross domestic product (GDP). That money comes from taxpayers' pockets.
He would prefer to see an intensive campaign to expand manufacturing and upgrade the province’s road and rail links.
There is no need to tackle 20 projects simultaneously, he said. If the province can concentrate on only one or two, and execute them successfully, its economy will benefit.
In April the manufacturing index improved by 4.2% year-on-year (y/y) to 98 index points. This was still 0.7% down on three years ago.
In the Free State the manufacturing sector consists largely of petrochemical operations at Sasolburg, and this subsector improved 7.1% y/y in April.
The broad trade index, which includes entertainment and tourism, is 6.4% up on a year ago at 129 index points. There was a fair recovery of 5.2% in the province’s wholesale sales, and vehicle sales were 18% up over the same period.
The stress index, which measures how difficult or easy it is to do business in the province, was 1.1% down on April 2010. This was especially because of a stronger rand and lower interest rates, but the province’s 28.1% unemployment rate in April was still above the country average.
Schüssler said far more practical thinking about job creation is required. The message from the market is not positive. Obstacles like red tape, high wage demands and strict labour legislation are holding the economy back.
- 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.
That is the question he frequently receives from Free State business people, said Mike Schüssler, the compiler of the Sake24 and BoE Private Clients Free State Barometer, a unique series of statistical indices measuring the pulse of the provincial economy.
The latest Free State barometer, published on Wednesday, shows a 10.6% rise for April this year compared with April last year.
Schüssler said it should be remembered that the recent recession was the worst in our lifetime.
Recovery therefore comes off a very low base. If we compare the figures with those of three years ago, we are only now beginning to make up what we have lost.
Examining the index for financial, property and business services, one can see exactly what he means. In April this year it stood at 112 index points, 12.1% up on a year ago. But three years ago the index was at 121 points; the sector is therefore still 11.8% weaker than before the recession.
Since its high in December 2006, the Free State housing market has lost up to three-quarters of its turnover, and estate agents are still struggling to survive, said Schüssler.
The best performing indices for April were transport (188 points and 17.8% up year-on-year) and government expenditure (177 points and 15.1% up).
Free State provincial government chief economist Itumeleng Moses said like Schüssler, he is pretty worried about the sustainability of high government spending.
It's not ideal, he said, for the government to be one of the biggest employers in the province, contributing 28.9% to the gross domestic product (GDP). That money comes from taxpayers' pockets.
He would prefer to see an intensive campaign to expand manufacturing and upgrade the province’s road and rail links.
There is no need to tackle 20 projects simultaneously, he said. If the province can concentrate on only one or two, and execute them successfully, its economy will benefit.
In April the manufacturing index improved by 4.2% year-on-year (y/y) to 98 index points. This was still 0.7% down on three years ago.
In the Free State the manufacturing sector consists largely of petrochemical operations at Sasolburg, and this subsector improved 7.1% y/y in April.
The broad trade index, which includes entertainment and tourism, is 6.4% up on a year ago at 129 index points. There was a fair recovery of 5.2% in the province’s wholesale sales, and vehicle sales were 18% up over the same period.
The stress index, which measures how difficult or easy it is to do business in the province, was 1.1% down on April 2010. This was especially because of a stronger rand and lower interest rates, but the province’s 28.1% unemployment rate in April was still above the country average.
Schüssler said far more practical thinking about job creation is required. The message from the market is not positive. Obstacles like red tape, high wage demands and strict labour legislation are holding the economy back.
- 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.
