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Pretoria - Although a massive hike in government expenditure in February played a big part in the increase in economic activity in the Eastern Cape, several key sectors are still struggling to lift their heads.
February state expenditure was a significant 28.3% up on February 2010. Together with an 18% rise in activity levels in the transport sector, it was largely responsible for the overall Sake24 and BoE Private Clients' Eastern Cape Barometer being 15.7% up on a year ago at 116.2 index points.
The almost-16% rise is the highest since December 2004.
Economists.co.za economist Mike Schüssler, who compiled the Eastern Cape barometer, said the higher state expenditure figure derives largely from an increase in salaries and other short-term expenditure like medical care.
The province’s other economic sectors, apart from construction and electricity, also had a relatively good February.
Activity in the important manufacturing sector was 7.6% up on a year ago, while the agricultural sector improved by 2.6%. Growth rates appear to be tapering off because they were much lower than in January and the past three months.
Although monthly figures are erratic and one should avoid putting too much emphasis on the degree of change, it does indicate that business in these sectors is slowing down.
The province’s manufacturing sector relies heavily on the motor industry and the latest positive trend of rising vehicle sales is good news.
Motor manufacturing in the province was 10% up on a year ago, driven by higher sales.
Vehicle sales in South Africa rose 24.7% year-on-year (y/y) in March and in the past 13 months to end-February sales in the Eastern Cape showed double-digit y/y growthr.
The wholesale and business services sectors have apparently shaken off the shackles of the recession and are improving nicely.
The broad trade index, which represents all enterprises in the retail, wholesale and entertainment industry, was also 7.7% up.
The weighty financial and business services sectors also improved 6.8%, while both performed better than has been the case for some months.
But the province’s construction industry is still experiencing difficulty. February activity levels in the sector were 24.3% down on February last year, and almost 5% down on January 2011.
But even in this volatile sector revival seems to be on the way.
In March a R1bn project, the Boardwalk in the Nelson Mandela Bay metro, was opened. It is expected to include a five star hotel with 140 rooms. Construction will take 24 months.
According to Emfuleni Resorts chairperson Bongi Siwisa, the project will create more than 5 000 jobs and on finalisation of the project about 2 100 people will be taken into employment.
The project is expected to add a cumulative R26bn to indirect household income, said Siwisa.
- 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.
February state expenditure was a significant 28.3% up on February 2010. Together with an 18% rise in activity levels in the transport sector, it was largely responsible for the overall Sake24 and BoE Private Clients' Eastern Cape Barometer being 15.7% up on a year ago at 116.2 index points.
The almost-16% rise is the highest since December 2004.
Economists.co.za economist Mike Schüssler, who compiled the Eastern Cape barometer, said the higher state expenditure figure derives largely from an increase in salaries and other short-term expenditure like medical care.
The province’s other economic sectors, apart from construction and electricity, also had a relatively good February.
Activity in the important manufacturing sector was 7.6% up on a year ago, while the agricultural sector improved by 2.6%. Growth rates appear to be tapering off because they were much lower than in January and the past three months.
Although monthly figures are erratic and one should avoid putting too much emphasis on the degree of change, it does indicate that business in these sectors is slowing down.
The province’s manufacturing sector relies heavily on the motor industry and the latest positive trend of rising vehicle sales is good news.
Motor manufacturing in the province was 10% up on a year ago, driven by higher sales.
Vehicle sales in South Africa rose 24.7% year-on-year (y/y) in March and in the past 13 months to end-February sales in the Eastern Cape showed double-digit y/y growthr.
The wholesale and business services sectors have apparently shaken off the shackles of the recession and are improving nicely.
The broad trade index, which represents all enterprises in the retail, wholesale and entertainment industry, was also 7.7% up.
The weighty financial and business services sectors also improved 6.8%, while both performed better than has been the case for some months.
But the province’s construction industry is still experiencing difficulty. February activity levels in the sector were 24.3% down on February last year, and almost 5% down on January 2011.
But even in this volatile sector revival seems to be on the way.
In March a R1bn project, the Boardwalk in the Nelson Mandela Bay metro, was opened. It is expected to include a five star hotel with 140 rooms. Construction will take 24 months.
According to Emfuleni Resorts chairperson Bongi Siwisa, the project will create more than 5 000 jobs and on finalisation of the project about 2 100 people will be taken into employment.
The project is expected to add a cumulative R26bn to indirect household income, said Siwisa.
- 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.
