Richards Bay holding its own

2008-07-16 00:00

THE economy of KZN’s manufacturing hub, Richards Bay, performed reasonably well during the second half of 2007, although it is likely that its performance has taken a severe knock with the power crisis this year.

According to the latest economic and business report for Richards Bay and the Uthungulu District, compiled by University of KZN economist Clive Coetzee, the level of economic activity increased by 6,3 percentage points.

The growth in economic activity on a year-on-year basis was 14%.

“The real test is the impact of the electricity crisis,” noted Coetzee.

Richards Bay is home to a number of major manufacturers that consume large quantities of electricity.

Major businesses in the area include BHP Billiton (aluminium smelter), Foskor (chemicals), Richards Bay Minerals, Tata Steel, Mondi Paper and Bell Equipment.

“This is not a consumer-dominated economy, so the interest rate hikes and rising inflation would not impact this economy as heavily as in Pietermaritzburg,” explained Coetzee.

He said significant expansions in industrial, warehousing and workshop space by existing businesses occurred in 2007.

The harbour recorded a 4,6 percentage point year-on-year increase in the number of vessels in and out.

Goods to the value of R69 billion were exported during 2007.

The retail sector’s share of the overall number of businesses in the local economy grew from 6,7% in 2005 to 17% in 2007.

The accommodation sector performed well in 2007. The average monthly number of bed nights sold surged by 26,18%.

New vehicle sales took a battering, declining 12,2 percentage points.

Residential house prices grew by over 30%, while sectional title property prices grew by about 11%.

It is unlikely that this trend will continue in future, given the troubles faced by the residential market.

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