Province may top national growth
September 8, 2006
By Moses Mdewu Mackay
The Western Cape economy is likely to out-perform the national economic growth forecast in the near future.
This is according to the provincial trade and investment promotion agency Wesgro, which released its annual report this week.
Chief executive Ismail Dockrat said their expectation was testimony to the robust growth of sectors such as construction (6.5%), wholesale and retail trade (7%), and transport and communication (6.3%) which collectively account for 44% of the Western Cape's economic output.
Last year, the provincial economy reflected strong growth with the estimated regional gross domestic product rising to 5% in real terms.
It is also forecast to average 4.8% a year until2008, which is slightly higher than the projected national average of 4.4%.
Dockrat said real fixed investment growth for the province averaged 4.4% a year from 1999 to 2004, slightly higher than the national performance of 3.5%.
There were also indications that fixed investment was to accelerate, with real growth coming in at 8.4% last year, thereby increasing the province's ration of fixed investment to regional GDP from 16.5% in 2001 to about 18% last year.
Dockrat said: "This is indicative of a sustained improvement in the Western Cape's investment performance. Over the period 1999 to 2004, the construction sector displayed the highest growth in fixed investment spending (11.4% a year)."
In contrast, the growth in fixed investment spending for agriculture and manufacturing averaged 3.5% over the same period. Overall, growth in fixed investment was projected to accelerate to 9.5% in 2006/07.
Dockrat said Western Cape exports performed well from 1999 to 2002, growing by 9.4% in real terms.
But due to the strength of the rand, export performance contracted overall in 2003 and 2004, declining by nearly 5% in 2004. But export-oriented products such as fruit, steel and wine showed remarkable resilience, growing more than 5% between 2002 and 2004.
Last year, once exporters were used to the strong rand, exports rose by 17.2% to more than R33 billion in real terms.
More than 38% of the Western Cape's exports were generated in agriculture, fishing, food and beverages.
Other key contributors were textiles, metals and machinery