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Johannesburg - Second-quarter economic growth in 2010 could be somewhat shy of the first quarter's 4.6%.
The Sake24 and BoE Private Clients provincial barometers for May show that, although the economies of the four provinces on which the barometers focus grew year on year, negative factors like unemployment have been taking their toll.
The barometers focus on Gauteng, the Western Cape, the Eastern Cape and the Free State. Other than in the Western Cape, the May provincial barometers improved year on year, but growth remained weaker than in the previous few months.
This confirms a sideways or even downward trend in several business and consumer confidence indicators for the second quarter.
Concern about the shakiness of the global economic recovery largely contributed to the weaker confidence level, especially as many countries are making plans to scale down or are already scaling down last year's fiscal stimulus packages.
The Transnet strike in May negatively affected the Gauteng and the Western Cape transport indices in particular, said Mike Schüssler, chief economist at Economists.co.za and compiler of the barometers.
The provincial manufacturing indices had strong year-on-year growth, but the Free State and the Western Cape’s manufacturing indices contracted quarter on quarter.
The initial rebound of a sector is always faster than that in the period following it, said Schüssler. In the second quarter growth was not as rapid as in the first.
On Thursday Statistics South Africa (Stats SA) will publish its manufacturing index for May.
Schüssler said the increase in economic stress has mainly been because of a lack of job creation in the economic recovery. Various economists have pointed out the dangers of the so-called jobless growth that South Africa is currently experiencing.
According to Stats SA, the official unemployment rate was 25.2% in the first quarter, with only 12.8 million people having jobs.
Large interest rate cuts are a thing of the past and inflation is probably close to turning around, Schüssler believes.
If South Africa does not start creating jobs soon, the country will have problems and the economy will be unable to expand sustainably, he pointed out.
To view the barometers for the respective provinces, click here.
- Fin24.com
The Sake24 and BoE Private Clients provincial barometers for May show that, although the economies of the four provinces on which the barometers focus grew year on year, negative factors like unemployment have been taking their toll.
The barometers focus on Gauteng, the Western Cape, the Eastern Cape and the Free State. Other than in the Western Cape, the May provincial barometers improved year on year, but growth remained weaker than in the previous few months.
This confirms a sideways or even downward trend in several business and consumer confidence indicators for the second quarter.
Concern about the shakiness of the global economic recovery largely contributed to the weaker confidence level, especially as many countries are making plans to scale down or are already scaling down last year's fiscal stimulus packages.
The Transnet strike in May negatively affected the Gauteng and the Western Cape transport indices in particular, said Mike Schüssler, chief economist at Economists.co.za and compiler of the barometers.
The provincial manufacturing indices had strong year-on-year growth, but the Free State and the Western Cape’s manufacturing indices contracted quarter on quarter.
The initial rebound of a sector is always faster than that in the period following it, said Schüssler. In the second quarter growth was not as rapid as in the first.
On Thursday Statistics South Africa (Stats SA) will publish its manufacturing index for May.
Schüssler said the increase in economic stress has mainly been because of a lack of job creation in the economic recovery. Various economists have pointed out the dangers of the so-called jobless growth that South Africa is currently experiencing.
According to Stats SA, the official unemployment rate was 25.2% in the first quarter, with only 12.8 million people having jobs.
Large interest rate cuts are a thing of the past and inflation is probably close to turning around, Schüssler believes.
If South Africa does not start creating jobs soon, the country will have problems and the economy will be unable to expand sustainably, he pointed out.
To view the barometers for the respective provinces, click here.
- Fin24.com
