Events and Exhibitions
ECONOMIST HIGHLIGHTS ‘ ECONOMY SHIFT ’ TO WESTERN CAPE
By Eamonn Ryan
Dr Azar Jammine , director and chief economist of Econometrix with a speciality in the construction sector , unpacked the National Budget at an event sponsored by AfriSam on 24 February .
He pointed out that over the past year construction was the worst performing sector of the economy . This of course affects not just the HVAC & R sector but allied industries such as transport equipment and investment in machinery and equipment , which Jammine says is 20 % down from where it was two years ago .
Not only has the construction sector performed poorly , but within that declining figure there are other variances which skew the pain . Western Cape has overtaken Gauteng as the geography where the highest number of building plans are being passed – meaning the decline is even more pronounced in places like Gauteng and is flat in KwaZulu-Natal .
The Western Cape appears largely responsible for the positive national growth rate in residential plans passed , continuing to produce significant outperformance , with its number of units ’ residential plans passed growing , for instance , by a very strong 50.76 % year-on-year for the three months to July .
This strong growth is leading to the likelihood that Western Cape ’ s annual building plans passed for 2022 may exceed that of Gauteng for the first time in recorded history , notwithstanding that Gauteng is still the largest provincial economy as well as the province with the largest population . In 2019 , Gauteng ’ s share of plans passed accounted for 48.5 % of total plans completed which was already down from 55.7 % just prior to its decline .
This may be a permanent shift as the world economy enters the Fourth Industrial Revolution with its emphasis on modern services-dominated sectors heavily dependent on skilled labour . The Western Cape appears best at attracting and retaining these .
In his Budget overview , Jammine pointed to a decline in capital investment that is entirely linked to the deterioration of state-owned enterprises which have been “ completely annihilated over the last six years ”. He pointed out that National Treasury has in fact been extremely conservative in projecting an increase in capital expenditure to about 4 % if one
Photos by © Eamonn Ryan | RACA Journal
Dr Azar Jammine , director and chief economist of Econometrix .
Attendees from all sectors of the construction sector and labour .
A graph showing how South Africa ’ s GDP growth tracked global averages and has now deviated considerably due to the impact of Eskom loadshedding .
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