Buoyant year for PMB

2012-03-01 00:00

KWAZULU-NATAL experienced a production-led economic recovery in 2011, bucking the national trend.

While consumers continued to spend money at healthy levels, manufacturing, agriculture and quarrying led economic growth in the province.

Local economist Clive Coetzee said the KZN economy grew by an estimated 3,32% last year, on the back of a bumper final quarter.

The Pietermaritzburg economy outperformed the provincial economy, growing by an estimated 3,72% in 2011 — a strong recovery given that the local economy contracted by an estimated 0,67% in 2010.

The city’s growth was supported by the buoyant retail and government sectors.

KZN’s growth outperformed the national economy, which grew by 3,1% in 2011. The national economy recorded a strong final quarter on the back of a buoyant services sector that gained its impetus from stronger consumer spending.

The province’s manufacturing sector benefited from higher levels of exports, particularly to Asia, Brazil and the U.S.

This trend was reflected in higher employment levels in KZN’s manufacturing sector. Employment in this sector rose from 371 000 at the end of 2010 to 428 000 at the end of 2011.

KZN’s consumption-driven sectors recorded positive growth, but did not perform exceptionally well.

“General disposable income levels in KZN tend to be lower than in Gauteng and the Western Cape. Furthermore, there has not been a major new stimulus for this sector. There has not been major tax relief, inflation is still an issue and interest rates have remained steady. Unemployment in KZN is also still fairly high.”

While Pietermaritzburg’s growth rate is set to remain positive, Coetzee warned that the city would not sustain a robust growth rate this year. “There is a lot more risk … from inflation, house prices and lower real disposable income levels. Wage increases will not grow strongly this year.”

Durban’s economy, which grew by an estimated 3,25% last year, is expected to flourish in 2012 on the back of international events and tourism, infrastructure spending and higher disposable income levels.

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