Durban’s growth badly hit

2008-06-12 00:00

In what is undoubtedly a tale of two halves, the tougher trading and general economic environment spread to Durban during the second half of 2007, in contrast to the strong growth in economic activity recorded during the first half of last year.

According to the economic and business report for 2007, conducted by University of KwaZulu-Natal economist Clive Coetzee, the greater Durban area’s Economic Performance Index (EPI) crashed 18,2% during the latter half of 2007, after growing 36,8% during the first six months of the year.

On the whole, the 2007 EPI grew 21% year on year.

Apart from a strong festive season, the retail sector hobbled along for lengthy periods during the second half of 2007, weighed down by an ongoing consumer-side slowdown.

Durban’s hospitality and entertainment sector cooled down a fair bit, recording a year-on-year decrease of 3,6% in 2007.

However, the number of hotel rooms sold in 2007 grew 8,38% year on year, a testament to Durban’s ability to draw consumer-spending from residents of various parts of the province.

Mainstays such as the Durban Port and Durban International Airport performed fairly well in terms of activity levels.

Domestic passenger movements at Durban International Airport grew 20% year on year, while international passenger movements increased by a healthy 15,5% year on year in 2007.

Total tonnage bulk cargo movement at the port increased by four percent year on year, driven mainly by an increase in imports.

“This is supportive of the transport industry, as these goods have to be moved inland.”

Coetzee noted that several other sectors continue to perform fairly well.

These include transport, (non-residential), construction and trade (including exporting, warehousing and manufacturing).

He said additions to industrial and warehousing space moved ahead fairly robustly during 2007.

He expects the trend in warehousing to continue, given the rising fuel costs, as companies will look to hedge against this factor by constructing warehouses in strategic locations.

Coetzee warned that negative sentiment in the business community over the electricity crisis and other threats would conspire to limit any significant growth in the manufacturing sector.

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