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In March, the Sake24 and BoE Private Clients’ Gauteng Barometer, which is compiled by Mike Schüssler of Economists.co.za, climbed on an annualised basis for the second successive month.
The 3.4%-increase comes after the richest province struggled for a long time to shake off last year’s recession.
The barometer is also growing on a monthly and three-monthly basis.
The province’s economic growth index climbed by 0.2%, the first increase in the index since August 2008.
“At last there’s good news for Gauteng,” Economists.co.za economist Gillian Findlay said.
“There’s no economic banquet yet, but the famine has definitely ended.”
Mining, construction, commercial and financial and business services are the only sectors that are still falling on an annualised basis.
The mining sector is suffering because of the falling profitability of gold mines in Gauteng.
The 14.5% decline in the construction index is already much better than in October last year, when it fell by nearly 40%.
Despite its 1.1% decline, the commercial index, which makes up about 15% of the province’s economy, is well on the way to recovery.
Findlay said that the increase in motor vehicle sales, which account for nearly a third of the province’s commercial index, contributed to the sector’s recovery.
“Commerce was hit very hard in Gauteng, but things already look much healthier,” she said.
“The sector has turned around, and the worst is over.”
Financial and business services, which include the JSE’s trading volumes, property transfers, repayment credit and mortgage bonds, fell by 9.2% on an annualised basis, but have turned around on a three-month basis.
Findlay said that this disappointing performance was largely the result of property transfers, of which are still too few.
“Though house prices are climbing, the sales volumes aren’t good yet, and the number of property transfers in March fell by an annualised 14%,” she said.
“Interest rates may have fallen, but consumers are still fairly pessimistic, and banks are still strict with their lending criteria.
“Political uncertainty and the leadership vacuum in the government also contribute to negativity. Fixed assets are very sensitive to political uncertainty, and people will only buy when they are certain and comfortable about the future.”
Government spending, which was recently added to the barometers and makes up about 18.6% of the Gauteng economy, grew by a healthy 11.5% on an annualised basis. The index has been climbing since the start of the economic crisis.
Findlay said this is to be expected, because in trying economic times governments are expected to intervene to alleviate negative factors in other parts of the economy.
As in the rest of the economy, the manufacturing sector also helped the Gauteng economy on the recovery path by growing 4.5% on an annualised basis.
The transport, storage and communication index, as well as the electricity index, which are both strongly concurrent indicators and therefore reflect the present state of the economy, climbed on an annualised basis.
- Sake24.com
