Moderate growth in Q1

2011-06-07 00:00

THE KwaZulu-Natal economy remained on the front foot in the first quarter of 2011, posting moderate growth on the back of positive gains made in the transport, wholesale and retail sectors.

According to Pietermaritzburg-based economist Clive Coetzee, the Provincial Gross Domestic Product (GDP) in the first three months of 2011 grew by an estimated 4,14% on a non-seasonal, year-on-year basis or 4,29% on a seasonally-adjusted, year-on-year basis.

SA’s official economic growth figure in the first quarter of 2011 came in at 3,6% on a year-on-year basis, or 4,8% on a seasonally-adjusted and annualised, quarter-on-quarter basis. Although the first quarter (2011) estimate figure for KZN remains positive, Coetzee attributed much of the province’s growth to “base-effects”, as the latest figure has been compared with a very low base in the first quarter of 2010.

The manufacturing sector in the province also posted positive growth — although the sector underperformed when compared to the national manufacturing sector.

A major portion of KZN’s manufacturing sector is involved in the beleaguered clothing and textiles sub-sector, which has started to experience severe job losses and turmoil emanating from the minimum-wage debacle between the National Bargaining Council for the Clothing Manufacturing Industry and certain factory owners in Newcastle.

Coetzee expects the provincial economy to post slightly lower growth rates over the course of 2011. He said the recent tsunami and earthquake disaster in Japan impacted negatively on the automotive sub-sector in KZN.

On the whole, however, the provincial economy has rebounded well off the back of negative growth rates in 2009, the year of the recession.

The hotel and leisure, storage/warehousing and communication sectors in KZN also posted positive estimated growth rates in the first quarter of 2011. The rebound in consumer confidence as a result of lower interest rates and lower inflation helped fuel growth in the regional economy — as did the return of global trade activity, which impacted positively on activity in KZN’s major ports (Durban and Richards Bay).

“People are returning to credit and are buying more now. Their ability to borrow money has been enhanced. The international economy is recovering and there is an increase in demand for our exports.”

The provincial economy is estimated to have posted positive seasonally-adjusted, year-on-year growth rates of 1,83% in the first quarter of 2010, 3,66% in the second quarter of 2010, 3,77% in the third quarter and 4,06% in the fourth quarter.

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