KZN lags behind in recovery

Bloemfontein - KwaZulu-Natal's recovery from the recession is not as strong as that of the other coastal provinces, but there was no cause for concern, said Economists.co.za economist Mike Schüssler .

Sake24 and BoE Private Clients’ KwaZulu-Natal Barometer for December showed annual growth of 4.8% to 99 index points.

The big loser was the construction index, which had contracted by 30.8% compared with the corresponding period last year.

According to Schüssler, who compiles and analyses the barometer information for Sake24, the construction sector is expected to struggle for some time yet as it is a lagging indicator. It merely reflects the sharp property market slump during the recession.

The trade index was the star performer and rose 9.3% year on-year (y/y). According to Schüssler, the increase over the Christmas period was because of increased retail sales of durable goods, such as television sets and sound equipment.

The province's transport index rose 8.8% in December to 139.6 points.

Increased freight  volumes moved through the Durban and Richards Bay ports.

Other than in most other provinces, government expenditure in KwaZulu-Natal declined in December. The index was 9.1% down on December 2009. This was not necessarily a bad sign, said Schüssler.

Increased state expenditure, particularly on the revenue side, cancelled the benign effect of lower interest rates, he explained.

- Sake24

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