Financial crisis – KZN bucks world trend

KwaZulu-Natal’s boom times seem to be making a comeback, with growth that is outstripping the country. But local economists and business leaders have cautioned that it’s too early in the recovery to be overly optimistic.

Provincial treasury released data this week showing that businesses in the province had a much better year-end than expected, despite continued uncertainty in Europe, one of SA’s biggest export destinations.

The KZN Business Barometer and Investment Monitor reports, compiled by economist Mike Schussler, grew 6.7 percent year on year in November, fuelled by overall growth of 3.7 percent and balanced by the economic stress index, which measures factors like inflation, interest rates and unemployment, that declined 2.8 percent.

“Economic expectations for KZN are good, as proven by recent strong growth in fixed investment in the province,” the KZN Investment Monitor said.

KZN’s inflation rate, 5.4 percent in November, was lower than national inflation, which reached 6.1 percent. “Most industries in KwaZulu-Natal seem to be improving…” the monitor said.

Good news for property owners was that this market had turned the corner, which will lead to better construction projects and job creation.

Durban Chamber of Commerce and Industry CEO Andrew Layman said the reports were “encouraging” and good news for Durban. “Many business people will be surprised, however, because they might not have felt that 2011 was such a positive year…“ Layman said.

Pietermaritzburg Chamber of Business CEO Melanie Veness was less upbeat, saying the spike in manufacturing was mainly seasonal.

Trade and Investment KZN CEO Zamo Gwala said the data reflected the private sector’s ability to pull the economy in a positive direction.

“It is too early to say that the KwaZulu-Natal economy is out of the doldrums, as we do not operate in isolation… However, the achievement is commendable,” Gwala said. - Independent on Saturday