Johannesburg – Gauteng’s economy can’t boast anything other than weak growth.
MARI BEUKES | FIN24
The Sake24 Gauteng Barometer for June was 6.3% up year-on-year (y/y), but over the previous three months had declined 0.9%.
The compiler of the barometer, Economists.co.za economist Mike Schüssler, said telecommunications, construction and vehicle and retail sales are among Gauteng’s bright spots.
“It's still wintry in the Gauteng economy, but a little bit of sunshine seems to be breaking through the clouds,” said Schüssler.
He said retail sales in May (the latest available figures) were 4% up y/y.
Vehicle sales were excellent once more, and 12.7% up on June last year.
The barometer’s trade index, compiled from vehicle, petrol, retail and wholesale sales, fell 1% in the three months to June. But the index was still 8.3% up y/y in June.
The Gauteng barometer’s construction index for June was 12% up on the previous year. In the three months to June it had also risen 11%.
Schüssler said the manufacturing sector is struggling, especially with the decline in metals manufacturing.
In June Gauteng produced 6% less ferrous and non-ferrous metal y/y. This sector carries a 31% weighting in the barometer’s manufacturing index and therefore has militated against the good showing by vehicle and food manufacturers.
The barometer’s June manufacturing index was still 0.4% up y/y, but in the previous three months had fallen by 2.3%.
The barometer’s transport, storage and communications index was 13.4% up y/y in June, but had declined by 3.6% over the previous three months.
This index is compiled from data on air and land transport in Gauteng, as well as countrywide cellphone and landline calls.
The index measuring the use of cellphones and the internet was 21% up y/y in June.
Schüssler said telecommunications are still a major national driver of economic growth.
“People are still chatting on their cellphones and surfing the internet. It's a sector in which consumers are spending more.”
The number of passengers arriving at the OR Tambo Airport was 3.6% down in June and overland transport increased 4.7%.
In the three months to June Gauteng’s mining index improved by 4.4%.
“It has rebounded from the first quarter when mining production was at its lowest level for 51 years,” said Schüssler.
He says the mining sector will therefore improve in the short term, but the weak gold price and rising costs will keep it under pressure.
The barometer’s index measuring economic stress in Gauteng fell 0.2% in June and was 3.1% down from a year ago.
Economic pressure is calculated based on unemployment and inflation.
Gauteng’s unemployment rate was down to 25.4% in June, from 25.6% in May. Inflation however climbed to 5.8%.
Gauteng was the only province with a higher inflation rate in June. - Sake24