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Bloemfontein - Despite decline in the mining and construction sector, the Free State economy remained on the road to recovery in August.
The Free State barometer's growth index was 4.4% higher than a year ago, and 0.6% higher than three months ago.
This was still not the start of a growth phase, but rather a continuing recovery period, said Economists.co.za economist Mike Schüssler, the compiler of the Free State Barometer.
He pointed out that government's current decision to retain and strengthen recovery momentum could be decisive for growth going ahead.
Free State growth, measured over the past three years, was flat, and this could improve only if government again invested in growth and job-creating projects.
The province's infrastructure, and roads in particular, required urgent renovation to attract industries and more tourists, he said.
Municipalities, provincial government and national government rendered a contribution of 17% to the province's economy.
Although the index for government expenditure was 7.3% higher than a year ago, in the past three months a decline of 0.3% had been observed.
After the Fifa World Cup soccer tournament, there was a reduction in government projects in the Free State and the 22.6% fall-off in the province's construction index also to some extent reflected this.
Schüssler said the decline was to be expected, because governments spent more money during the recession to get the economy going again.
Now careful reflection is needed to allocate available funds to job-creating and growth-stimulating projects.
The star performer in August was the agricultural index, which increased by 11.3% year on year. This growth is particularly attributable to a 13.2% rise in the volumes of agricultural crops like maize, coal and sunflowers.
Car sales surprise
The meat index rose 2%, but economic activity in the sector producing vegetables and fruit was 21% down. The industry was however very small in the Free State and therefore did not have a large effect on the overall agricultural index.
The Free State's trade index, which measures activity in the retail and wholesale sectors as well as tourism, was doing remarkably well, said Schüssler. This index was 7.2% up on a year ago. In the province 54% more passenger vehicles and 22% more bakkies were sold than a year ago.
This strong growth somewhat surprised Schüssler, particularly following a year in which huge lows had been experienced.
Other commercial products in the Free State are also selling briskly.
The index for durable appliances like television sets was 15.9% higher than in August 2009. Food purchases were 2.2% up on the year before.
The province's tourism sector was experiencing a quiet period following the FIFA World Cup, and the number of passengers visiting the Bloemfontein airport declined 5.7% year-on-year (y/y).
Petrol sales, however, rose 6% y/y.
The mining index decline of 7.2% y/y certainly contributed to depressing the province's overall index by 2.7%.
Activity in the sector which had once, with agriculture, been one of the two pillars of the Free State economy had reduced considerably in recent years.
The stress index, which measures how easy or difficult it is to do business in the province, rose 7.2%. Schüssler was, however, not too concerned about this rise and reckoned it would be short-lived. The one factor that did concern him was the rising unemployment in the province.
In August 2010, 7.3% more people had been without jobs than in the same period last year. Not enough work was being created in the Free State, he said, and government and the private sector needed to reflect on a growth path.
Passengers were pushing their luggage trolleys through the arrivals hall of the Bloemfontein airport. In the wake of the World Cup tournament, the province's tourism sector was experiencing a quiet period and in August the number of passengers visiting the airport had declined by 5.7% y/y.
The star performer in August was the agricultural index, which rose 11.3% y/y. It was 4.4% up on August last year, while the Free State barometer's growth index was 0.6% higher than three months previously.
- Sake 24.com
The Free State barometer's growth index was 4.4% higher than a year ago, and 0.6% higher than three months ago.
This was still not the start of a growth phase, but rather a continuing recovery period, said Economists.co.za economist Mike Schüssler, the compiler of the Free State Barometer.
He pointed out that government's current decision to retain and strengthen recovery momentum could be decisive for growth going ahead.
Free State growth, measured over the past three years, was flat, and this could improve only if government again invested in growth and job-creating projects.
The province's infrastructure, and roads in particular, required urgent renovation to attract industries and more tourists, he said.
Municipalities, provincial government and national government rendered a contribution of 17% to the province's economy.
Although the index for government expenditure was 7.3% higher than a year ago, in the past three months a decline of 0.3% had been observed.
After the Fifa World Cup soccer tournament, there was a reduction in government projects in the Free State and the 22.6% fall-off in the province's construction index also to some extent reflected this.
Schüssler said the decline was to be expected, because governments spent more money during the recession to get the economy going again.
Now careful reflection is needed to allocate available funds to job-creating and growth-stimulating projects.
The star performer in August was the agricultural index, which increased by 11.3% year on year. This growth is particularly attributable to a 13.2% rise in the volumes of agricultural crops like maize, coal and sunflowers.
Car sales surprise
The meat index rose 2%, but economic activity in the sector producing vegetables and fruit was 21% down. The industry was however very small in the Free State and therefore did not have a large effect on the overall agricultural index.
The Free State's trade index, which measures activity in the retail and wholesale sectors as well as tourism, was doing remarkably well, said Schüssler. This index was 7.2% up on a year ago. In the province 54% more passenger vehicles and 22% more bakkies were sold than a year ago.
This strong growth somewhat surprised Schüssler, particularly following a year in which huge lows had been experienced.
Other commercial products in the Free State are also selling briskly.
The index for durable appliances like television sets was 15.9% higher than in August 2009. Food purchases were 2.2% up on the year before.
The province's tourism sector was experiencing a quiet period following the FIFA World Cup, and the number of passengers visiting the Bloemfontein airport declined 5.7% year-on-year (y/y).
Petrol sales, however, rose 6% y/y.
The mining index decline of 7.2% y/y certainly contributed to depressing the province's overall index by 2.7%.
Activity in the sector which had once, with agriculture, been one of the two pillars of the Free State economy had reduced considerably in recent years.
The stress index, which measures how easy or difficult it is to do business in the province, rose 7.2%. Schüssler was, however, not too concerned about this rise and reckoned it would be short-lived. The one factor that did concern him was the rising unemployment in the province.
In August 2010, 7.3% more people had been without jobs than in the same period last year. Not enough work was being created in the Free State, he said, and government and the private sector needed to reflect on a growth path.
Passengers were pushing their luggage trolleys through the arrivals hall of the Bloemfontein airport. In the wake of the World Cup tournament, the province's tourism sector was experiencing a quiet period and in August the number of passengers visiting the airport had declined by 5.7% y/y.
The star performer in August was the agricultural index, which rose 11.3% y/y. It was 4.4% up on August last year, while the Free State barometer's growth index was 0.6% higher than three months previously.
- Sake 24.com
