Global economic events and strikes in South Africa are taking their toll on fixed investment in KwaZulu-Natal. The total investment index of the latest fixed investment monitor, as compiled by Mike Schüssler of Economists.co.za, grew by only 1.2% year-on-year. A 1% growth in the total investment index has become a trend in KwaZulu-Natal in recent months, showing that investment has been slowing down.

Quarter-on-quarter the total investment index was up 4.2%. While the shorter term growth number does not look too bad, investment in KwaZulu-Natal is simply not as strong as it was last year. This is understandable given the earlier strikes across the country. Some companies are starting to rethink their relationship with South Africa and while they might not pull out of the country, they will not make further investments as they believe the labour disputes make South Africa an unreliable partner. Things like these will eventually have a long term effect on investment in all the provinces.

Transport equipment investment growth could be short-lived

Most of the fixed investment categories in KwaZulu-Natal struggled in July. Investment in transport equipment was the only fixed investment category that showed solid positive increases of 6.9% year-on-year and 10.3% quarter-on-quarter. The increase in investment in transport equipment coincides with the increase in vehicle manufacturing in KwaZulu-Natal in July. At the time a lot of vehicles were being purchased. However, the effect of the strikes at carmakers and component manufacturers in August and September will start to affect the growth in investment in transport equipment in coming months.

Click below link to download Investment Monitor for July 2013:
KwaZulu-Natal Investment Monitor July 2013.docx - 1.6 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/