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Bloemfontein - Free State economic growth is under pressure.
Key sectors like construction, agriculture and even commerce have lost steam. Unemployment remains high and local businesspeople are frustrated at the provincial government's delays in approving development projects and maintaining infrastructure.
Nevertheless there are still some bright spots, such as the province's transport index, which reflected the highest level of activity among all the provinces participating in BoE Private Clients and Sake24’s barometers.
In September this year the Free State Barometer was 0.7% down on the same period last year. The stress index was 5.5% higher, implying that it had become more difficult to do business in the Free State.
The Free State economy would appear to be more under pressure than before, especially because economic growth was still not leading to more sustainable job creation in the province, said Economists.co.za economist Mike Schüssler, the compiler of the Free State Barometer. The province's September unemployment rate was 29.5%.
The biggest loser was the construction index, which had fallen 27.1% year on year, and 15.7% over the past three months.
Wayne Kriel, FNB’s head of commercial banking services in the Free State, said that in the run-up to the World Cup soccer tournament there had been great delight that the construction of the stadium, roadworks and related projects had helped stimulate the economy. But the current reality was that many of the projects were complete and unemployment was rising – putting disposable income under severe pressure.
But two indices had gone from strength to strength in recent months: transport, which was 5.5% up on a year ago, and manufacturing, which was 7.2% up. These two Free State indices were outperforming their counterparts in the other provinces.
The Free State transport index stood at 184 points, while the next best, that of the Western Cape, was at 146 points.
Ben Deysel, managing director of Highway Junction in Harrismith, currently the largest truck stop in South Africa, said that his company's experience clearly showed that the province was experiencing a revival in through-traffic. A great deal of ore was being transported by road from the Northern Cape to the ports via Bloemfontein and Harrismith.
Chinese orders had resulted in large volumes.
Deysel is also the Free State chairperson of the AHI. He said he expected the positive trend in road transport to persist into early next year.
Government expenditure in the province for September was 10.7% above that for the corresponding period last year.
In the long run it was unsustainable for government to continue pumping money into the economy on such a large scale, said Schüssler.
He quoted government statistics showing that in the province a great deal of money was being spent on housing and social grants, in particular. The province currently had 8.4 million people dependent on grants, and up to March 2010 the Department of Human Settlements had built 20 232 houses in the province.
The private sector was also beginning to lose confidence in Free State premier Ace Magashule and his team’s ability to remove obstacles to investment.
- Sake24
For business news in Afrikaans, go to Sake24.com.
Key sectors like construction, agriculture and even commerce have lost steam. Unemployment remains high and local businesspeople are frustrated at the provincial government's delays in approving development projects and maintaining infrastructure.
Nevertheless there are still some bright spots, such as the province's transport index, which reflected the highest level of activity among all the provinces participating in BoE Private Clients and Sake24’s barometers.
In September this year the Free State Barometer was 0.7% down on the same period last year. The stress index was 5.5% higher, implying that it had become more difficult to do business in the Free State.
The Free State economy would appear to be more under pressure than before, especially because economic growth was still not leading to more sustainable job creation in the province, said Economists.co.za economist Mike Schüssler, the compiler of the Free State Barometer. The province's September unemployment rate was 29.5%.
The biggest loser was the construction index, which had fallen 27.1% year on year, and 15.7% over the past three months.
Wayne Kriel, FNB’s head of commercial banking services in the Free State, said that in the run-up to the World Cup soccer tournament there had been great delight that the construction of the stadium, roadworks and related projects had helped stimulate the economy. But the current reality was that many of the projects were complete and unemployment was rising – putting disposable income under severe pressure.
But two indices had gone from strength to strength in recent months: transport, which was 5.5% up on a year ago, and manufacturing, which was 7.2% up. These two Free State indices were outperforming their counterparts in the other provinces.
The Free State transport index stood at 184 points, while the next best, that of the Western Cape, was at 146 points.
Ben Deysel, managing director of Highway Junction in Harrismith, currently the largest truck stop in South Africa, said that his company's experience clearly showed that the province was experiencing a revival in through-traffic. A great deal of ore was being transported by road from the Northern Cape to the ports via Bloemfontein and Harrismith.
Chinese orders had resulted in large volumes.
Deysel is also the Free State chairperson of the AHI. He said he expected the positive trend in road transport to persist into early next year.
Government expenditure in the province for September was 10.7% above that for the corresponding period last year.
In the long run it was unsustainable for government to continue pumping money into the economy on such a large scale, said Schüssler.
He quoted government statistics showing that in the province a great deal of money was being spent on housing and social grants, in particular. The province currently had 8.4 million people dependent on grants, and up to March 2010 the Department of Human Settlements had built 20 232 houses in the province.
The private sector was also beginning to lose confidence in Free State premier Ace Magashule and his team’s ability to remove obstacles to investment.
- 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.
