Listed below are some interesting articles and fascinating facts and figures for KZN.

Slower growth and increased stress

The decline in the barometer was due to a combination of slower economic growth and higher economic stress.  The KwaZulu-Natal growth index increased 0.5% year-on-year, while the economic stress index, which measures negative factors like inflation, interest rates and unemployment, increased 2.4%, the most in eight months. This was caused by growing unemployment and consumer prices.  The economy seems to be in a period of stagflation, characterized by high inflation and low growth. Even if the national economy does not go into a recession, growth will disappoint this year, both in South Africa and in KwaZulu-Natal. This has to do with more than just the strikes, which lead to the loss of 9 million working days in the first half of the year. Electricity and infrastructure constraints hold back the economy, as does the prospect of higher interest rates.

Municipalities underspending

Spending by the three spheres of government in KwaZulu-Natal is held back by underspending of around 16% by the province's municipalities. This, combined with very low real growth in spending meant that the government index declined 4.1% year-on-year despite the fact that the central government spent 11% more. In many cases the government seems to spend all its money in the last quarter of the fiscal year through March and then spending dries up in the new financial year. The problem is that the spending isn't even throughout the year, specifically in the municipalities, and they seem to not be spending all the money that they get from the central government. This is of great concern and is influencing the whole of the economy.

Click below kink to view above article:
KwaZulu-Natal Business Barometer May 2014.docx - 0.2 Mb

Click below link to view KZN Live Vehicle Population:
KZN Live Vehicle Population.xlsx - 0.2 Mb

Click below link to view TomTom Traffice Index:
TomTomTrafficIndex2013annualZA-mi.pdf - 5.5 Mb


Growth in building activity slows in Q2 

After breaching the key 50-index point mark in 1Q2014, the FNB/BER building confidence index fell by 11 points to 41 in 2Q2014.

The current level indicates that about 60% of respondents are dissatisfied with prevailing business conditions.

“The 11 point drop in overall building confidence was largely due to a sharp fall in the confidence of building material manufacturers” said John Loos, property economist at FNB. The decline in confidence was largely due to weaker domestic demand.

Domestic sales and orders received were significantly lower than in 1Q2014. However, the export market remained buoyant, but this was not enough to boost confidence. According to Loos “The slowdown in domestic demand could also partly be due to the prolonged labour unrest in the platinum sector and while exports, mainly to the rest of Africa, remained robust, volumes are small in comparison to the domestic market.”

Click below link to view the FNB/FER Building Confidence Index for June 2014:
BuildPress_14Q2.pdf - 0.1 Mb

Dr Clive Coetzee

General Manager:  Infrastructure Management and Economic Services

KZN Provincial Treasury

Economist (PhD UKZN)

033 897 4538

http://www.kzntreasury.gov.za/