South African private sector in recession
Thématique :
sud afrique
The Watchdog
The South African private sector economy may well be in recession already as business activity levels are falling sharply in four of SA’s provinces. South Africa is one of the leading trading partners of Zambia
The Sake24 Provincial Barometers for October shows that activity levels in the private sector economies of Gauteng, Western Cape, Eastern Cape and Free State are falling dramatically and that several individual economic sectors are already in recession.
The Provincial Barometers were developed by Sake24 and T-sec chief economist Mike Schüssler. It uses a comprehensive set of existing statistical data from various sources to compile the coincident indices.
The Gauteng Barometer, which measures the pulse of South Africa’s premier provincial economy, declined in October by 14.8% to 128 index points compared to October 2009. The Western Cape Barometer slipped by 12% to 145 points. The Eastern Cape Barometer shed 10.2% to 141 points and the Free State by 10.4% to 122 points.
“The national economic growth rate for the third quarter was only 0.2%. If you strip out the contribution of government and personal services, the private sector economy shrunk by 0.6%. This follows on growth of 5.1% in the second quarter,” said Schüssler.
This slowdown follows significant double digit declines in all the provincial barometers since July this year. “This does not bode well for growth in the fourth quarter of the year.”
The shapes of the individual provincial barometers do not suggest that these economies have hit rock bottom. “We have seen a slowdown over the past 12 months and I expect the barometers to bottom after the second quarter of 2009,” said Schüssler.
“It is, however, clear the provincial economies that depend on primary industries such as mining and agriculture, are feeling the heat.
“I expect that other provinces such as North West and the Northern Cape that rely on mining activities, will also be under significant pressure,” he said.
Dire straits for property
The Gauteng Barometer shows that the broad financial, real estate and business services sector is in dire straits. Activity levels in this sector in October were nearly 16% lower than in October last year.
“The main reason is the significant decline in residential housing market. The number of houses sold in October was nearly 40% lower than in the corresponding month last year, while the new installment credit sales were also down by more than 30%,” said Schüssler.
“I have never seen decreases like this and it shows that this sector is in recession,” he said.
Similar decreases in the financial, real estate and business services sector are also evident in the other provinces.
The South African private sector economy may well be in recession already as business activity levels are falling sharply in four of SA’s provinces. South Africa is one of the leading trading partners of Zambia
The Sake24 Provincial Barometers for October shows that activity levels in the private sector economies of Gauteng, Western Cape, Eastern Cape and Free State are falling dramatically and that several individual economic sectors are already in recession.
The Provincial Barometers were developed by Sake24 and T-sec chief economist Mike Schüssler. It uses a comprehensive set of existing statistical data from various sources to compile the coincident indices.
The Gauteng Barometer, which measures the pulse of South Africa’s premier provincial economy, declined in October by 14.8% to 128 index points compared to October 2009. The Western Cape Barometer slipped by 12% to 145 points. The Eastern Cape Barometer shed 10.2% to 141 points and the Free State by 10.4% to 122 points.
“The national economic growth rate for the third quarter was only 0.2%. If you strip out the contribution of government and personal services, the private sector economy shrunk by 0.6%. This follows on growth of 5.1% in the second quarter,” said Schüssler.
This slowdown follows significant double digit declines in all the provincial barometers since July this year. “This does not bode well for growth in the fourth quarter of the year.”
The shapes of the individual provincial barometers do not suggest that these economies have hit rock bottom. “We have seen a slowdown over the past 12 months and I expect the barometers to bottom after the second quarter of 2009,” said Schüssler.
“It is, however, clear the provincial economies that depend on primary industries such as mining and agriculture, are feeling the heat.
“I expect that other provinces such as North West and the Northern Cape that rely on mining activities, will also be under significant pressure,” he said.
Dire straits for property
The Gauteng Barometer shows that the broad financial, real estate and business services sector is in dire straits. Activity levels in this sector in October were nearly 16% lower than in October last year.
“The main reason is the significant decline in residential housing market. The number of houses sold in October was nearly 40% lower than in the corresponding month last year, while the new installment credit sales were also down by more than 30%,” said Schüssler.
“I have never seen decreases like this and it shows that this sector is in recession,” he said.
Similar decreases in the financial, real estate and business services sector are also evident in the other provinces.
