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Bloemfontein - The KwaZulu-Natal economy is on hold.
Although there is no fear of a recession, there is cause for concern over stagnation in the provincial economy. This slowdown is affecting small and medium enterprises the worst.
The Sake24 KwaZulu-Natal barometer for August improved by a barely noticeable 0.1% this term, although it still shows strong performance year-on-year (y/y) with a 5.6% rise.
This barometer measures economic activity in the private sector in the province as well as government expenditure.
The best performance came from the transport sector (9% higher y/y). This strong index is however also retracting and has shrunk for the fifth consecutive month quarter-on-quarter.
Harbours in the province remain busy and the amount of freight handled in Durban and Richards Bay increased by 9.2%. However, the number of passengers passing through the King Shaka Airport dropped 7.7% in August.
The volatile construction index experienced a slight revival in recent months, but it is still 6.2% lower than a year ago.
“One has to keep in mind that the completion of one or two large construction projects can push figures up temporarily, but in general the sector is struggling,” said Mike Schüssler, who compiles the KwaZulu-Natal barometer.
The agricultural index (2% lower than a year ago) has been declining over the past 14 months, but the drop is less marked than a few months ago. Meat sales appeared to have improved in recent months, partly due to high grain prices pushing up feed prices.
Unlike some other provinces the financial, property and business sectors are still struggling.
Property sales are particularly tight, and the number of property transfers shrank 1.1% y/y. On a slightly more positive note, the number of new mortgages approved rose by 2.5%.
The increase of 6.7% in the trade index is primarily due to excellent vehicle sales in the province, which improved 29.9% in August. In contrast, retail sales increased only 1.1%
“The effects of higher fuel and electricity prices are starting to hurt consumers’ spending ability,” said Schüssler.
- Sake24
For business news in Afrikaans, go to Sake24.com.
Although there is no fear of a recession, there is cause for concern over stagnation in the provincial economy. This slowdown is affecting small and medium enterprises the worst.
The Sake24 KwaZulu-Natal barometer for August improved by a barely noticeable 0.1% this term, although it still shows strong performance year-on-year (y/y) with a 5.6% rise.
This barometer measures economic activity in the private sector in the province as well as government expenditure.
The best performance came from the transport sector (9% higher y/y). This strong index is however also retracting and has shrunk for the fifth consecutive month quarter-on-quarter.
Harbours in the province remain busy and the amount of freight handled in Durban and Richards Bay increased by 9.2%. However, the number of passengers passing through the King Shaka Airport dropped 7.7% in August.
The volatile construction index experienced a slight revival in recent months, but it is still 6.2% lower than a year ago.
“One has to keep in mind that the completion of one or two large construction projects can push figures up temporarily, but in general the sector is struggling,” said Mike Schüssler, who compiles the KwaZulu-Natal barometer.
The agricultural index (2% lower than a year ago) has been declining over the past 14 months, but the drop is less marked than a few months ago. Meat sales appeared to have improved in recent months, partly due to high grain prices pushing up feed prices.
Unlike some other provinces the financial, property and business sectors are still struggling.
Property sales are particularly tight, and the number of property transfers shrank 1.1% y/y. On a slightly more positive note, the number of new mortgages approved rose by 2.5%.
The increase of 6.7% in the trade index is primarily due to excellent vehicle sales in the province, which improved 29.9% in August. In contrast, retail sales increased only 1.1%
“The effects of higher fuel and electricity prices are starting to hurt consumers’ spending ability,” said Schüssler.
- 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.
