Cape Town – The Western Cape economy is still slowing down, although sectors such as agriculture show promising signs of recovery.
FRANCOIS WILLIAMS | FIN24
In June the overall index of the Sake24 Western Cape Barometer fell 0.7%, down to 112 index points. That is 11.7% higher than in the heat of the recession three years ago.
On a monthly and three-monthly basis, the index contracted 0.8% and 1% respectively.
Economists.co.za economist Mike Schüssler, who collects and analyses the barometer data, said the decline has more to do with stress factors than anything else since the growth index is 2.9% up on the year before.
The June stress index, which reflects interest rates, inflation, unemployment and summonses for debt, is 3.5% up on the year before.
The Western Cape manufacturing sector is still treading water because, although the manufacturing index is 0.8% up on a year ago, on a monthly and a three-monthly basis it slid 0.7% and 2.8% respectively.
Food and beverage production improved 12.4%, but metal production was 6.2% down and textile operations were 1% weaker.
Although business confidence among Western Cape manufacturers, according to the Bureau for Economic Research (BER) at the University of Stellenbosch, rose from 47 in the first quarter to 58 in the second, the BER does not consider this sustainable owing to poor demand and the impact of the European debt crisis, Carin Smith reports.
Up to 40% of Western Cape exports go to Europe.
According to the BER, business confidence in the financial services sector is still at fairly high levels and this will probably support continued growth in the sector, making a significant contribution to the Western Cape economy.
In the first quarter about 12 000 additional people had jobs compared with the fourth quarter of last year.
Schüssler is surprised at the 14.1% increase in vehicle sales in the Western Cape. The transport and communications index was 13% up in June.
The number of passengers moving through the Cape Town and George airports rose by 1.8%. This figure has been rising for 31 successive months. Freight volumes through the ports of Cape Town, Saldanha and Mossel Bay are 4.3% up.
The communications sub-index is 21% higher, reflecting the growing cellphone industry and a 58% increase in data usage. Hire purchases in the Western Cape in June rose by 7% and the number of summonses for debt by 11%, indicating that people are incurring more debt. - Sake24