SA still lacklustre

May 14 2012 10:09
Mari Beukes, Sake24
Johannesburg – South Africa's economic growth is still too weak to make a real difference to enterprises and the situation of the jobless.

In March the Sake24 and BoE Private Clients South African Barometer was 3.8% up on the year before, but some provinces are still falling behind. The barometer is compiled from the provincial barometers, which reflect economic activity in the country's five biggest provinces in terms of their gross domestic product.

In March, the Gauteng barometer, which carries the most weight in the South African barometer, was 8.3% stronger than the year before. But the Eastern Cape barometer fell 3.9%, and that of the Free State lifted a mere 0.1%.

Mike Schüssler of Economists.co.za, who compiles the barometers, said South Africa's economic growth seems to have reached a plateau for now.

"The strongest growth in recent times was in the first and fourth quarters of last year and I don't think we'll do better than that this year."

Schüssler said Europe's economic problems and falling commodity prices in particular are hampering the country's growth. But, unlike Europe, South Africa will not have to struggle through a recession.

He said most sectors in the country are still showing positive growth, and agriculture is apparently starting to recover. But the mining sector's performance remains dismal.

"We're not in trouble; we just won't be able to work and produce income in the way we would wish. We are growing at about two-thirds the rate we could achieve."

Schüssler said consumer spending has been underpinning the country's economy for the past year-and-a-half.

"In most of the provinces consumers are spending less – other than in Gauteng, where spending is still ratcheting up." About 4.1 million of the country's 13 million workers earn their living in Gauteng.

In March Gauteng's trade index, which is compiled from retail, wholesale and petrol sales, was 9.6% better than three months previously.

During this period the KwaZulu-Natal trade index could add only 4.4% and that of the Western Cape only 5.5%. "Restaurants are still complaining that they are not busy enough, but supermarkets will still fare well," 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.



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