Provincial Applications & WC Economic Trends PP & DF Report

Transcription

1 Provincial Applications & WC Economic Trends PP & DF Report 1

2 Contents Table of Figures... 2 Definitions / Data Assumptions... 3 Acronyms Introduction Methods Data and Analysis Global and SA GDP data as Context Real Western Cape GDP Data Western Cape Environmental and Development Applications Results discussion Conclusion and Recommendations References Appendix 1. Other known data sources to consider Appendix 2. Data Table of Environmental and Planning Applications CONTACT Table of Figures Figure 1. Real SA GDP Growth by Sector to 3 March 216 (various periods)... 5 Figure 2. Real SA National Industrial Sector growth for 1 January to 3 March Figure 3. Global growth and commodity price forecasts (World Bank, 216)... 6 Figure 4. Real SA Construction Industry GDP quarterly data (5 years)... 7 Figure 5. Real SA Business, Financial & Real Estate GDP - quarterly data (5 years)... 7 Figure 6. Real Western Cape GDP Growth by Sector to 3 March 216 (various periods)... 8 Figure 7. Real Western Cape GDP by industry sector & Environmental and Planning Applications... 8 Figure 8. Western Cape Environmental Applications (211/12 to 215/16) Figure 9. Western Cape Environmental Amendment Applications (211/12 to 215/16) Figure 1. Western Cape Planning Applications (211/12 to 215/16) Figure 11. Western Cape Planning non-applications (211/12 to 215/16) Figure 12. Real Construction Sector Growth (Y/Y) and Development Applications Figure 13. JSE growth (Q/Q) and Western Cape Applications Figure 14. JSE growth (Y/Y) and Western Cape Applications Acknowledgements All data for tables and figures in this document is sources from Stats SA unless otherwise stated 2

3 Definitions / Data Assumptions The Financial Year for this report is defined as being that of the WCG being 1 April to 3 March with the most recent complete financial year being 1 April 215 to 3 March 216. This is termed the 215/16 financial year. The financial year is typically broken up into 4 quarters of 3 months each. The start and end dates of specific financial years vary between organisations with some using the calendar year from 1 January to 31 December as their financial year. Current GDP is the total value of goods and services that are produced in an economy in a certain time period. When current data is analysed in a time-series the data will contain some inflation effects which can be removed Real GDP is the total value of goods and services that are produced in an economy in a certain time period, with the term real indicating that the GDP has been adjusted to remove the effects of inflation. Quarterly growth at a seasonal adjusted and annualised rate, expressed in an annualised rate, reflects changes in real GDP from one quarter to the next. This annualised rate is calculated by raising the percent change between the two quarters by the power (exponent) of four. The quarters are seasonally adjusted 1 to remove all seasonal affects before its annualised. [This method is based on the assumption that the percentage change from the one quarter to the following quarter will be maintained for the entire year (sometimes questionable assumption, but the best option in the absence of better alternatives). This method is called annualising and is used in South Africa as the official economic growth rate.] Statistics South Africa Acronyms GDP Gross Domestic Product JSE Johannesburg Stock Exchange LUP Land Use Planning LUPA Land Use Planning Act, 214 (Act 3 of 214) MPC Monetary Policy Committee NEMA National Environmental Management Act, 1998 (Act 17 of 1998) PP&DF Provincial Property and Development Forum Stats SA Statistics South Africa SPLUMA Spatial Planning and Land Use Management Act, 213 (Act 16 of 213) Q/Q quarter-on-quarter (comparison) SA South Africa SARB South African Reserve Bank WCG Western Cape Government Y/Y year-on-year (comparison) 1 No Stats SA indication on how these seasonal adjustments are made was available for this analysis. 3

4 1. Introduction The Western Cape Provincial Planning and Development Forum (PP&DF) meets quarterly. The meeting of 26 May 216 resolved as follows: Resolved: The verified statistics collated for the financial year 215/216 to be forwarded to the economist in CD: Development Planning, to provide a basic analysis in relation to economic trends during the same period. 2. Methods Quarterly statistics were gathered for 5 annual periods up to and including 215/16 (where possible) for: a) Western Cape Environmental Applications; b) Western Cape Development Applications (selected categories only), and; c) Global, SA, Western Cape Provincial Economic Performance (only annual Western Cape economic data obtained). Other relevant informative information has also been included. Five years of data were considered necessary for insight into trends over time. Data were then analysed and reported on. 3. Data and Analysis This report presents data on the South African economy GDP up to the end of March 216 while only including data on the Western Cape economy up to December 214 as this represents the most recent available sets of relevant data from Statistics South Africa (Stats SA) as the national provider. 4

5 3.1. Global and SA GDP data as Context Figure 1. Real SA GDP Growth by Sector to 3 March 216 (various periods) Source: Stats SA / WC Figure 1 above provides analysis on the ten Standard Industrial Classification (SIC) sector divisions representing the South African economy as a whole. All depicted sectors showed constrained growth in short term of one or 3 years relative to the recorded growth over the medium to longer terms of five or ten years. The Construction sector (8.1%) had the highest average annual real growth over 2 years in South Africa (SA) with Financial Services, Business Services and Real Estate sector (7.4%) and Transport and Communications (6.7%) being the only other sectors that demonstrated growth in the region of 7% over the 2 years to 3 March 216, thus forming the top tier of growth in SA over the last two decades. Note that these 3 sectors vary in size and make up 4.%, 2.6% and 1.2% of the national economy respectively. Agriculture (4.9%), Wholesale & Retail trade, Hotels and Restaurants (4.8%) formed a second growth tier with production having expanded in the region of 5% while Personal Services (3.6%), Government Services (2.5%) and Manufacturing (2.4%) provided third growth tier when viewed over 2 years. Utilities (Electricity, Gas and Water supply, 1.%) and Mining (-.4%) provided virtually stagnant average annual growth in SA over the last 2 year period. Construction lead the growth rate in SA when measured over the over last 2 years and over 1 years, 3 years and 1 year. It is only in the 5 year window to 3 March 216 that Agriculture narrowly out-performed Construction. Innovative ways to sustain and drive observed growth and investment should be pursued. 5

6 Figure 2. Real SA National Industrial Sector growth for 1 January to 3 March 216 Source: Stats SA Figure 2 above shows GDP growth in various South African sectors by providing annualised 2 seasonally adjusted data for final quarter of the 215/16 financial year. The data indicate a quarter with marginal growth in certain sectors while other sectors shrank in real terms over the 3 months. The reasons for slowed growth are not analysed in depth here. Suffice to note that the entire SA economy demonstrated declining growth since a peak of 3.7% in the 4th quarter of 21/11 to a low of -.2% in the 4 th Quarter of 215/16. The overall growth rate achieved in the 215 calendar year was 1.2% (World Bank, 216). Figure 3 shows certain global economic pressures and forecasts. Figure 3. Global growth and commodity price forecasts (World Bank, 216) These data show that SA is not alone in experiencing slower growth in recent years. SA is however underperforming against our peer-group of emerging and developing economies. 2 A definition of annualised is provided at the start of this document. The author prefers Y/Y analysis. 6

7 11_12 Q1 11_12 Q2 11_12 Q3 11_12 Q4 12_13 Q1 12_13 Q2 12_13 Q3 12_13 Q4 13_14 Q1 13_14 Q2 13_14 Q3 13_14 Q4 14_15 Q1 14_15 Q2 14_15 Q3 14_15 Q4 15_16 Q1 15_16 Q2 15_16 Q3 15_16 Q4 11_12 Q1 11_12 Q2 11_12 Q3 11_12 Q4 12_13 Q1 12_13 Q2 12_13 Q3 12_13 Q4 13_14 Q1 13_14 Q2 13_14 Q3 13_14 Q4 14_15 Q1 14_15 Q2 14_15 Q3 14_15 Q4 15_16 Q1 15_16 Q2 15_16 Q3 15_16 Q4 Figure 4. Real SA Construction Industry GDP quarterly data (5 years) (%) (GDP Rm) quarterly GDP (const. 21, Rm) quarterly change Y/Y (const. 21, %) annualised seasonally adjusted change Q/Q. (const. 21, %) Note: Y/Y denotes year-on-year; Q/Q denotes quarter-on-quarter Figure 5. Real SA Business, Financial & Real Estate GDP - quarterly data (5 years) (%) (GDP quarterly GDP (const. 21, Rm) quarterly change Y/Y (const. 21, %) annualised seasonally adjusted change Q/Q (const. 21, %) These data show that SA is not alone in experiencing slower growth in recent years. SA is however underperforming against our peer-group of emerging and developing economies. Figure 4 above indicates that year-on-year (Y/Y) growth in the Construction sector ticked up to 2.6% in the 4 th quarter of 215/16 (up from 1.6% in the 3 rd quarter) after a sustained declining growth trend that began in the 1 st quarter of 213/14. 7

8 Figure 5 above however indicates that the country s largest economic sector, the Financial Services, Business Services and Real Estate sector remained flat at 2.4%. It remains to be seen whether South Africa will share in the World Bank s projected growth for Emerging and Developing economies of upwards of 3% from 216 onwards (see Figure 3). The SA Reserve Bank (SARB) revised the growth outlook for SA in 216 to.% in its latest Monetary Policy Committee (MPC) statement on 21 July 216 citing negative growth in the quarter to 3 March 216 as a contributing reason for this outlook Real Western Cape GDP Data This the Western Cape provincial economy and can be compared with SA data on page 5. Figure 6. Real Western Cape GDP Growth by Sector to 3 March 216 (various periods) Source: Stats SA / WCG DEA&DP Figure 7. Real Western Cape GDP by industry sector & Environmental and Planning Applications 8

9 11-12 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 annual GDP Rm SPLUMA applications Agriculture Mining Manufacture Utilities Construction Trade Tpt & Coms. Fin & Bus. Pers. Serv. Gov. Serv. Env. Ap. Rec. Plan. Ap. Rec. Figure 6 above show that Construction (5.%), Transports & Communications (5.%), Financial Services, Business Services & Real Estate (4.8%) and Wholesale and Retail Trade, Restaurants & Hotels (4.1%) have shown the greatest average annual growth in the province over 2 years. It is interesting to note the recent spark line up-tick in the data for Agriculture, Forestry & Fishing and the provincial Mining sector as at the end of the quarter ended 3 March 216. The data above in Figure 7 show the only available Stats SA data on annual provincial GDP that has been adapted to show quarterly applications data. Recommended: DEA&DP should investigate whether they can access proprietary quarterly data on economic sub-sectors from other provincial departments (e.g. Treasury) who may have this data. Similarly necessary software for analysis and dissemination of the data should be investigated Western Cape Environmental and Development Applications Not all data on all Development Applications within the province for 215/16 was available for this analysis as per the PP&DF resolution. The reason for this is as follows: Prior to the new planning dispensation, before the promulgation of SPLUMA and LUPA, DEA&DP had access to data about: ALL provincial Environmental Applications because NEMA is administered by Provincial Government; but LIMITED Development Applications, because DEA&DP administered / processed only certain applications and appeals pertaining to land use / development, in terms of various sets of old order planning related legislation. A great number of Development Applications were administered by Municipalities under previous delegated authority. Following the National legislation (SPLUMA) promulgation on 1 July 215 and the staggered promulgation of the Western Cape legislation (LUPA), ALL municipal land use matters are now 9

10 administered by municipalities. Certain land matters use as per schedules 4 & 5 of the SA Constitution are still considered to be a provincial and/or national mandate, in addition to handling by the municipalities. Thus, following 1 July 215 the number of development applications received by DEA&DP fell to just 6 applications in the quarter ended 3 March 216 because SPLUMA has devolved responsibility for the administration of such applications to municipalities. While SPLUMA requires provincial oversight, monitoring and support for municipalities in matters relating to the Act, it appears that capability to acquire data for this purpose requires further development. Recommended: DEA&D should put in place necessary information collection methods to enable access to sufficient municipal data on planning applications to fulfil SPLUMA obligations in terms of provincial support, monitoring and oversight of municipal land use planning functions. 1

11 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 Figure 8. Western Cape Environmental Applications (211/12 to 215/16) backlog reduced Env. Applications: Received Applications: Finalised A fall in the number of Environmental application received can be observed from 174 in 214/15 Q2 to only 21 in 214/15 Q4 (see Figure 8). Indications are that the fall in applications received allowed the backlog to be reduced (as shown by the bracket). Figure 9. Western Cape Environmental Amendment Applications (211/12 to 215/16) Amendment Appli.: Received Amendment Appli.: Finalised Recommended: The NEAS-System Reporting should be developed (if feasible/possible) to show whether environmental applications have been approved or not. A parameter to show the type of application 3 and one to show an estimated value of the application should also be developed (if feasible/possible). Recommended: Suggest data show the number of applications pending or outstanding at any time. 3 Application types may include a Basic Analysis (BA), Environmental Impact Assessment (EIA) and Other type(s). 11

12 11-12 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 Figure 1. Western Cape Planning Applications (211/12 to 215/16) SPLUMA Plan. Ap. Received* Plan. Ap. Finalised *incl. Appeals (regarded as non-applications) Figure 1 above clearly shows the effect of the new planning dispensation (SPLUMA and LUPA) on the planning applications received by DEA&DP. It is interesting to note the rise in the number of applications from the start of 211/12 (47) to peak of 175 at the start of 213/14. This is followed by a decline in the number of planning applications received with a small peak just before SPLUMA and LUPA were implemented. Figure 11. Western Cape Planning non-applications (211/12 to 215/16) Plan. non-ap. Received Plan. non-ap. Finalised The strong correlation between non-apps received and finalised can be observed from the data in Figure 11 above suggesting that this has been an area of administrative strength. Recommended: Definitions of the types of applications and non-applications required. 12

13 11_12 Q1 11_12 Q2 11_12 Q3 11_12 Q4 12_13 Q1 12_13 Q2 12_13 Q3 12_13 Q4 13_14 Q1 13_14 Q2 13_14 Q3 13_14 Q4 14_15 Q1 14_15 Q2 14_15 Q3 14_15 Q4 15_16 Q1 15_16 Q2 15_16 Q3 15_16 Q4 Recommended: Appeals data should be separated from initial applications data (if warranted / feasible / useful). Recommended: Suggest data show the number of non-applications pending or outstanding at any time. 4. Results discussion The effect of the promulgation of SPLUMA on 1 July 215 is apparent in data from the number of applications received by DEA&DP in the 5 years to 3 March 216. A current challenge exists to ensure data from municipalities is now collected in a coherent and well data-governed way that brings value to all sectors including policy makers and other decision takers. Figure 12 below shows year-on-year (Y/Y) growth in the South African Construction sector as columns. There appears to be some correlation between this growth (columns) and the provincial planning applications received (red dotted line). Figure 12. Real Construction Sector Growth (Y/Y) and Development Applications Applicatons received (n) Construction sector growth (%) Construction - quarterly change Y/Y (const. 21, %) Env. Applic.'s: Rec'vd Plan. App's Received 13

14 11-12 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 Figure 13. JSE growth (Q/Q) and Western Cape Applications JSE quarterly growth and WC Applications Plan. Ap. Rec. growth (Q/Q) % 12.% 1.% 8.% 6.% 4.% 2.%.% -2.% -4.% -6.% % Similarly to the analysis in Figure 12 relating to Construction sector growth, Figure 13 above indicates some correlation between the JSE quarterly growth (Q/Q) and planning applications received by the Western Cape Government. Figure 14. JSE growth (Y/Y) and Western Cape Applications 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% -5.% -1.% growth (Q/Q) growth (Y/Y) Plan. Ap. Rec. There also appears to be some correlation in the JSE s quarterly observed year-on-year growth during the observed 5 year period from 211/12 Q1 to 215/16 Q4. 14

15 5. Conclusion and Recommendations The body of text in this document provides several recommendations for consideration. These recommendations collectively suggest that the following broad areas of action could be of value Provincial government should continue to work to develop relationships with municipalities so that they might regularly obtain applications data in a desired format from municipalities for the necessary provincial functions of support, monitoring and oversight. The format for data to be obtained from municipalities together with necessary definitions require collaborative development with provincial municipalities. Further useful datasets and necessary tools for quarterly analyses should be considered and acquired if possible so that good information can assist evidence-based decisions as necessary at all levels. Ways to obtain the data and information needs of individual municipalities and other stakeholder groups relating to development applications should by explored and developed so that development is informed by the needs of information users and stakeholders. This document provides an initial analysis on Provincial applications and Western Cape Economic Trends and should form a basis for further Research and Development in this area, if warranted. The PP&DF recommendation that this brief analysis should be undertaken is to be commended. It will certainly lead to a greater focus on the systems, tools, data and information required to understand economic trends and their relationship to Development Planning within the Western Cape Province. END 15

16 References SARB South African Reserve Bank. Press Statement of the Monetary Policy Committee. 21 July 216 Stats SA (undated). Statistics South Africa. Measuring South Africa s Economic Growth. By Gerhard Bouwer GerhardB@statssa.gov.za Stats SA (216). Statistics South Africa. Quarterly GDP data for South Africa. World Bank Data extract on GDP by Country form the World Development Indicators: # World Bank Global Economic Prospects - Divergences and Risks. June 216. Page 5 or.pdf p23. Graphs. Appendix 1. Other known data sources to consider The following non-exhaustive list of data sets emerged during this analysis as potential sources of information for future analysis. National Treasury (data on the economy e.g. IHS-Global Insight and Quantec) Provincial Treasury (data on the economy e.g. IHS-Global Insight and Quantec) Insolvency data (for constructions / generally) Employment data (SA and Construction) UK (Drivers Jonas Crane Survey (structure / format / messages) SARB Construction Contractors Value Add Value of Building Plans passed (Stats SA) WCG GIS mapping of all applications received 16

17 Appendix 2. Data Table of Environmental and Planning Applications. 17

18 CONTACT For information enquiries please contact: Helena Jacobs, DPIM&R Director: Riette Fourie, DPIM&R Chief Town and Regional Planner: Julien Rumbelow, DPIM&R Innovation Economist: ENDS 18