ECONOMY: Downside Risk For W Cape
Recent Western Cape Business News
GDP growth in the Western Cape has traditionally outperformed that of the rest of the country. However, because the mining sector recovery played a significant role in driving national economic growth during 2010 and given base effects (the 2009 contraction was less pronounced in the Western Cape so the “bounceback” is likely to be more contained), this is unlikely to have been the case in 2010.
The RMB/BER business confidence index for 2011Q3 fell by 9 index points from 48 to 39. Similarly, business confidence in the Western Cape was 6 index points lower in 2011Q3, registering a value of 35.
According to Stats SA, only 1 000 jobs were created in the Western Cape during 2011Q3. However, compared to 2010Q3 the net increase in jobs totalled 52 000.
Overall, the baseline view is that the Western Cape will likely grow at the same pace as the national economy. However, the Western Cape’s exposure to Europe via exports is much greater than the rest of South Africa; therefore the downside risks are higher.
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