Increased business confidence and other positive macroeconomic indicators in KwaZulu-Natal means the provincial economy will grow by more than 3 percent this year.
So said Finance MEC Ina Cronjé last week. Speaking at the KZN Economic Symposium in Durban, she said she was “cautiously optimistic” with estimated economic growth prospects of 3.5 percent for the province for this year. This was higher than SA’s expected economic growth of below 3 percent for the year.
“KZN’s expected economic growth will largely be supported by the manufacturing sector and fix capital investment by the government… Many provincial macroeconomic indicators support the view or argument that the provincial economy is expanding,” said Cronjé.
She said the KZN economy experienced an increase of 3.28 percent last year compared with 3.42 percent during 2010 and -1.68 percent during the recession-hit year of 2009.
Cronjé said the growth rates also indicated that the tertiary sector industries continued to record positive growth rates largely on the back of low interest rates and consumer confidence.
KZN Treasury economist Clive Coetzee said: “The KwaZulu-Natal economy slowed somewhat over the last few months, but given the slowdown in the world economy and the province’s links to the eastern and European economies through its ports, it was to be expected. Although growth is slowing down, there is still no threat of a recession in KwaZulu-Natal.”
He said the slowdown in growth was also evident in the KwaZulu-Natal Barometer, compiled by Mike Schussler of Economists.co.za. The index (for December 2011) grew by 7.1 percent year on year, the slowest growth in 16 months. Coetzee said the research was an economic barometer and not GDP figures.
He said the barometer showed fixed investment growth in KZN was still very strong, growing at 20 percent year-on-year in December.
Coetzee, who does the research for KZN’s Business Confidence Index, said it had shown a rise from 65.78 points in 2009 to 73.25 late last year.
Pieter Laubscher, of the Bureau of Economic Research (BER), said the nationally run RMB/BER Business Confidence Index for the first quarter of 2012 showed that SA business confidence had increased for the past three quarters. But it was still lower than last March.
According to the BER, KZN business confidence (at 60 points) was higher than the other main provinces of Gauteng (50) and the Western Cape (49).
Laubscher, however, expressed concern about the trend of “jobless growth”. He said the rate of job creation in KZN had not grown in line with growth of sectors such as manufacturing and services.
Nedbank economist Nicky Weimar said SA economic growth was expected to be about 2.5 percent in 2012 and 3.4 next year.
