ILEMBE DISTRICT MUNICIPALITY

Transcription

1 ILEMBE DISTRICT MUNICIPALITY NOVEMBER 2010 QUARTERLY ECONOMIC INDICATORS AND INTELLIGENCE REPORT SECOND QUARTER APRIL - JUNE 2011 Enterprise Cnr Link Road and Ballito Drive Ballito, KwaZulu-Natal Tel: Fax:

2 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table of Contents SECTION 1 INTRODUCTION Overview of the District Economy Background and Objective of the Study Methodology Key Economic Indicators What to expect in the 3 rd Quarterly report... 9 SECTION 2 ECONOMIC INDICATORS AND ANALYSIS Demographic Profile Socio-Economic Indicators Employment, Education and Skills SAARF Living Standard Measure Economic Activity International Trade Tourism Business Confidence Enterprise Business Expansion & Retention Survey SECTION 3 CONCLUSION Key Findings ANNEXURE ASSUMPTIONS AND COMPREHENSIVE ECONOMIC INDICATORS A1.1 Population and Households A1.2 Racial Profile A1.3 HIV and AIDS A1.4 Gender Profile A1.5 Age Profile A1.6 Energy used for Lighting A1.7 Type of Toilet A1.8 Water A1.9 Type of Dwelling A1.10 Education Level A1.11 Employment and Unemployment A1.12 Employment by type and skill level A1.13 Employment by Industry Page 2

3 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A1.14 Gross Geographic Product by Industry A1.15 Income and Expenditure A1.16 Expenditure by Category A1.17 Expenditure by sub-category A1.18 Domestic Fixed Capital Investment by Investment Type A1.19 Domestic Fixed Capital Investment by Industry A1.20 Airport Passenger Movements A1.21 Port Movements LIST OF GRAPHS Graph 1 Racial Profile for Quarter 2 (2011) Graph 2 Gender profile for Quarter 2 (2011) Graph 3 Age Distribution for Quarter 2 (2011) Graph 4 HIV Positive and AIDS deaths in Quarter 2 (2011) Figure 5 Energy used for Lighting for Quarter 2 (2011) Graph 6 Type of Toilet for Quarter 2 (2011) Graph 7 Source of Water in Quarter 2 (2011) Graph 8 Type of Dwelling in Quarter 2 (2011) Graph 9 Employment Status in Quarter 2 (2011) Graph 10 Employment Rate - Strict and Expanded in Quarter 2 (2011) Graph 11 Formal and Informal Employment in Quarter 2 (2011) Graph 12 Employment contribution by Sector for Quarter 2 (2011) Graph 13 Formal Employment by Skill Level in Quarter 2 (2011) Graph 14 Level of Education Received in Quarter 2 (2011) Graph 15 GGP for Quarter 2 (2011) Graph 16 Distribution of Expenditure in Quarter 2 (2011) Graph 17 Breakdown of Total Expenditure into Sub-Categories in Quarter 2 (2011) Graph 18 Domestic Fixed Capital Investment by Type in Quarter 2 (2011) Graph 19 Domestic Fixed Capital Investment per Industry in Quarter 2 (2011) Graph 20 Shift-Share Analysis for Graph 21 Shift-Share analysis for by industry 2009/ Graph 22 Total Airport Passenger Movements Graph 23 Port movements for Durban and Richards Bay Graph 24 FNB House Price Index Real and Nominal growth as of June Graph 25 FNB Average House Price Index Graph 26 FNB valuers residential market strength index Graph 27 Activity level by income for Quarter Graph 28 Destinations visited in KZN 2009 (percentage contribution) Graph 29 BER/RMB Business Confidence Index Quarter Page 3

4 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 30 Advantages and disadvantages to locating business in Ballito Graph 31 Sales over two years Graph 32 Main constraints to expansion LIST OF TABLES Table 1: Summary of Key Economic Indicators... 5 Table 2: Population and Households in Quarter 2 (2011) Table 3: Household number for main places Table 4 Description of SAARF Living Standard Measures Table 5 Percentage contribution to each LSM group by province Table 6: Total Household Income and Expenditure for Quarter (Rm) Table 7 Percentage contribution to GDP Table 8 Employment Location Quotient for Table 9 Shift Share analysis for by industry 2009/ Table 10 Quarterly trends in vehicle sales South Africa Table 11 Total number of vehicle registrations per licensing district Table 12 Port movements for Quarter 1 and Quarter Table 13 Total Exports per District Table 14 Percentage Growth and Contribution of each HS Coded Export Item in Table 15 Total imports per District Table 16 Growth and Contribution of each HS Coded Import Item in Table 17 Gross Geographic Expenditure Table 18 Overview of KZN tourism market Table 19 SACCI BCI Quarter 2 (2011) Table 20 Percentage change of economic activity per sector in KZN over the last year, month and quarter 48 Table 21 Implications of a change in the economic risk/conditions variables Table 22 Economic Risk Monitor Page 4

5 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 SUMMARY OF KEY INDICATORS This section provides an overview of the key economic indicators that are presented in Section 2. The table below contains a summary of the key indicators for within the context of the KwaZulu-Natal province, and highlights the provincial and district indicators for 2010, and the second quarter change for the district. The indicators in this quarter report are derived from existing trends and desktop information sources. Table 1: Summary of Key Economic Indicators Key Indicator KwaZulu- Natal Quarter Population 10,645, , ,073 Households 2,494, , ,723 African 85.25% 90.48% 90.48% Race (%) Coloured 1.37% 0.46% 0.46% Asian 8.64% 6.91% 6.91% White 4.73% 2.15% 2.15% Gender (%) Male 48.22% 48.35% 48.40% Female 51.78% 51.65% 51.60% 0-14 years 33.09% 33.19% 32.87% Age (%) years 31.13% 31.67% 31.77% years 22.47% 21.49% 21.63% years 8.87% 9.11% 9.14% over 65 years 4.44% 4.53% 4.58% HIV/Aids (%) Education (% of total population) HIV Positive 16.10% 16.82% 16.58% Aids Deaths 1.21% 1.27% 1.22% No Schooling 14.14% 14.09% 13.96% Grade % 9.12% 9.13% Tertiary 3.72% 2.78% 2.82% Employed (Formal and informal ) Employment (number) Unemployed Not economically active Unemployment Rate (Strict) 24.67% 22.39% 22.00% Unemployment Rate (Expanded) 67.57% 71.54% 72.05% Formal 81.29% 78.32% 78.14% Type of Employment (%) Informal 18.71% 21.68% 21.86% Page 5

6 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Key Indicator KwaZulu- Natal Quarter Skill (%) Highly Skilled 12.79% 11.32% 11.45% Skilled 43.10% 40.50% 40.74% Semi and Unskilled 44.12% 48.18% 47.81% Agriculture, forestry and fishing 4.89% 9.52% 8.94% Mining and quarrying 0.61% 0.52% 0.53% Manufacturing 13.47% 16.79% 16.48% Electricity, gas and water 0.29% 0.11% 0.11% Employment by Industry (%) Construction 6.43% 6.44% 6.43% Wholesale and retail trade, catering and accommodation 22.05% 21.98% 22.27% Transport, storage and communication 5.69% 3.26% 3.26% Finance, insurance, real estate and business services 14.95% 13.58% 13.84% Community, social and personal services 16.87% 17.19% 17.34% General government 14.74% 10.61% 10.79% Agriculture, forestry and fishing 4.41% 9.84% 9.42% Mining and quarrying 1.27% 0.83% 0.79% Manufacturing 22.14% 29.17% 28.46% Electricity, gas and water 2.21% 0.93% 0.90% Gross Value Added by Industry (%) Construction 3.04% 2.83% 2.90% Wholesale and retail trade, catering and accommodation 14.17% 14.83% 15.06% Transport, storage and communication 13.63% 7.21% 7.16% Finance, insurance, real estate and business services 20.00% 19.85% 20.90% Community, social and personal services 6.25% 5.08% 5.07% General government 12.88% 9.43% 9.35% Durable Goods 10.12% 10.08% 10.55% Expenditure (%) Semi-Durable Goods 12.58% 13.00% 13.83% Non-Durable Goods 35.82% 36.02% 34.66% Services 41.48% 40.90% 40.96% Buildings and construction works 37.36% 32.57% 32.97% Domestic Fixed Investment (%) Machinery and other equipment 40.79% 49.22% 48.17% Transport equipment 20.13% 16.64% 17.18% Transfer costs 1.72% 1.58% 1.67% Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Page 6

7 SECTION 1 INTRODUCTION 1.1 Overview of the District Economy The District is situated on the east coast of South Africa, in the KwaZulu-Natal Province. is one of the 11 district municipalities of the KwaZulu-Natal province and is also the smallest District in the province, with a total population of approximately The District covers approximately 3260 square kilometres and is divided into four local municipalities. The four municipalities are: Ndwedwe Mandeni is located between two of Africa s busiest ports, Durban and Richards Bay, and is therefore well positioned not only to local, but also international markets. Despite its strategic location, faces numerous economic challenges such as the high levels of poverty in the rural inland areas, which contrasts with rapid development along its coastal regions. The District has been proactive in developing a broad based intervention to facilitate local economic development in response to its challenges of high rates of unemployment and correspondingly high levels of poverty. Enterprise is the Economic Development Agency of District with its key mandate to drive economic development and promote trade and investment. 1.2 Background and Objective of the Study This intelligence report comprises an assessment of key economic indicators for the District for the second quarter of 2011, i.e. April June This report will form part of the composite economic analysis for the entire 2011 period, to be completed in phases at the end of each quarter. What s new this quarter? Import data has been added to the International Trade section; The number of households for Greater town and Greater Ballito has been added to the demographics section; The SAARF Living Standard Measures for KwaZulu-Natal have been added;

8 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 International Airport passenger movements and Port movements for Durban and Richards Bay have been added to the Economic Activity section; Vehicle registration figures for Mapumulo, Ndwedwe and Stanger licensing districts have been added; Location Quotients, a tress index, and shift-share analysis, have been added to the Economic Activity section; Segments of the FNB House Price Index report for South Africa have been added; The BER/RMB Business Confidence Index for South Africa as well as the Business Barometer for KZN has been added to the Business Confidence section; A comparable economic risk profile for has been added to the Business Confidence Section; Results from the Ballito Business Survey conducted by Enterprise and the Chamber of Commerce, Industry and Tourism in Ballito as part of their Business Expansion and Retention Programme have been added. Basic tourism statistics for KZN have been added in the new Tourism section. The overall objective of this project is to present economic indicators and economic intelligence to assist Enterprise in driving its mandate, which is to promote trade and investment in the District of. This is the second phase of the quarterly reports that Enterprise intend on publishing for a two-year period. This second report is still a work in progress and comprises largely of desktop research and secondary data collection from various sources, future quarterly reports will be augmented with primary research surveys and interviews with key stakeholders. 1.3 Methodology This report utilises secondary data as a base off which estimates and projections are developed. Up-to-date data is available on a district and local municipal level for most of the indicators presented (up to 2010), however, some indicators are extrapolated in order to pull more outdated data (up to 2008 and 2009) through into the first quarter of Key Economic Indicators The following key indicators are utilised during this study: Population in District and Municipalities o Population growth o Population per age group o Population per racial group o Population per gender o Number of households per main place Socio-Economic Characteristics o Energy for electricity o Type of toilet o Water source Page 8

9 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 o Dwelling types Labour Statistics o Employment o Employment by Sector o Employment by type (formal and informal) o Employment by skill level SAARF Living Standard Measures per province Economic Activity o Sector Contribution to GGP o Income and Expenditure profile o Domestic Fixed Capital Investment by type o Domestic Fixed Capital Investment by industry o Tress Index o Location Quotient o Shift-Share Analysis o Vehicle population statistics o Airport Passenger Movements o Port movements o FNB house price index International Trade o KZN exports and imports by district o exports and imports by product Tourism Business Confidence o SAARF Business Confidence Index o BER/RMB Business Confidence Index o TIKZN Business Barometer o Economic Risk Analysis Results of the Ballito Business Survey 1.4 What to expect in the 3 rd Quarterly report Additional information that would be added to the 3 rd Quarterly Report is: The number of building plans approved per The number of electricity and water connections made per The number telephone connections made Municipal rates comparison Business Confidence Index for specifically Tourism statistics for specifically New projects and investment opportunities in New format with more pictures, emphasis on graphs/ tables and less wording Page 9

10 SECTION 2 ECONOMIC INDICATORS AND ANALYSIS This section comprises the bulk of the economic intelligence and statistical analysis, and is broken down into a number of sub-sectors, which include: a demographic profile; a socio-economic profile; education, employment and skills; economic activity; and international trade and business confidence. 2.1 Demographic Profile The District has experienced an average quarterly growth rate of 0.09% in population since 2000, bringing the population total in quarter 2 of 2011 to approximately 563,073 people. This accounts for 5.26% of the total population of KwaZulu-Natal. Table 2: Population and Households in Quarter 2 (2011) Population Households Number Average Quarterly Number Average Quarterly Growth Rate Growth Rate ( ) ( ) 563, % 134, % Mandeni 131, % 36, % 172, % 47, % Ndwedwe 143, % 29, % 114, % 21, % Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) The total number of households has increased at a faster quarterly rate than population (0.67%), indicating that the number of people per household has declined. Both Mandeni and experienced a positive quarterly average growth rate, with Ndwedwe and experiencing negative population and household growth rates. This is consistent with provincial and national trends which indicate that an increasing proportion of the population previously housed in rural areas are migrating to urban areas in search of employment and other opportunities. This is expected given that and Mandeni house much of the formal economic activity in the region.

11 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 3: Household number for main places Main Place Number of Households Greater Ballito Greater Town Source: StatsSA household count by sub-place 2010 Graph 1 displays the racial profile of the district and local municipalities. For the district and all local municipalities besides, Africans comprise over 90% of the total population, with having the largest Asian population (predominately Indian) of 18.3%. also contributes the largest portion of Whites (5.3%) of which a large numbers reside in the urban area of Ballito. comprises the largest African population (99.9%). In terms of average quarterly growth rates, the Coloured population experienced the most rapid growth (0.15% per quarter since 2000), while the White population experienced the slowest growth (0.006% per quarter since 2000). Graph 1 Racial Profile for Quarter 2 (2011) 120.0% 100.0% 80.0% Mandeni 60.0% 40.0% 20.0% 0.0% Black Coloured Asian White Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Graph 2 displays the gender distribution of the district and local populations. The gender split is fairly equal for most of the municipalities besides, which comprises 44.8% of males and 55.2% of females. 1 Greater Ballito includes Ballito Bay, Compensation Beach, Deepdale, Deepdene, Tugela, Willard s Beach, Blythedale Beach, Darnall, Salt Rock, Shaka s Rock, Shakaskraal, Tinley Manor beach, Zinkwazi Beach 2 Greater town includes Blowhard Estate, Chris Hani, Etete, Glen Hills, Ntabaningi, Shakaville, UCC informal, Groutville amongst other smaller areas Page 11

12 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 2 Gender profile for Quarter 2 (2011) 60.0% 50.0% 40.0% 30.0% 20.0% Male Female 10.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Graph 3 provides an indication of the age distribution within the district. From the graph it is clear that has a much greater percentage of the population under the age of 19 years (54.2%) in comparison with (44.5%). For all the local municipalities as well as the district, over 50% of the population falls under the age of 24 years old, while 62.5% of the population falls within the working age bracket (15 64 years). The most substantial decline in growth in is within the 0 14 year age bracket, which experienced an average decline in growth of 0.43% per quarter. This trend is also identified in the local municipal population between 0 14 years of age. The most substantial increases in growth occur in the over 70 year s bracket. There are no obvious explanations for these growth trends and this needs to be investigated further. Graph 3 Age Distribution for Quarter 2 (2011) 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Page 12

13 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 The final demographic indicator is that of HIV positive individuals and AIDS Deaths recorded. Graph 4 displays these trends. Graph 4 HIV Positive and AIDS deaths in Quarter 2 (2011) 25.00% 20.00% 15.00% 10.00% HIV Positive AIDS Deaths 5.00% 0.00% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) In the first quarter of 2011, Mandeni had the highest incidence of HIV with almost 20% of the population being infected by the virus, while 16.6% of the district population were infected. All of the municipalities have however experienced a decline in HIV prevalence growth over the period , with an average quarterly decline of 0.75% in. With regards to AIDS deaths, the same trend is observed, however at an even greater decline of 1.95% per quarter. This is a positive sign and indicates that preventative measures have been fairly successful in reducing the incidence of HIV and related AIDS deaths within the district. Key Findings: Out-migration of residents from Ndwedwe and to areas with urban-centres such as and Mandeni; has experienced a decline in HIV prevalence of 0.75% per quarter or 3% per annum 2.2 Socio-Economic Indicators Four socio-economic indicators are assessed before moving onto an analysis of growth indicators. The indicators analysed below are used as a measure of growth of social infrastructure such electricity, access to water, type of housing and type of toilets. Graph 5 below displays the energy used for lighting. Page 13

14 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Figure 5 Energy used for Lighting for Quarter 2 (2011) 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Electricity is the major source of energy for lighting in the district and both the Mandeni and local municipalities, accounting for 63%, 78%, and 86% of total energy sources respectively. Ndwedwe and are however both lagging behind the district trend with only 28% and 35% of the population having access to electricity respectively, although growth trends indicate that has experienced a 1.7% average quarterly growth rate in electricity usage (however off a low base). These households are predominately using candles as their main source of energy. The type of toilet used is displayed in graph 6 below. The percentage of people using flush or chemical toilets is still relatively low for all municipalities, with an average of 27.5% for. This trend is higher for both Mandeni and (34.6% and 38.3% respectively), with Ndwedwe only achieving a rate of 16% and a very low rate of 7.4%. Page 14

15 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 6 Type of Toilet for Quarter 2 (2011) 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) The largest source of toilet facility for all municipalities are pit latrine toilets, with this accounting 70% in, and 56% for the entire district. This highlights the importance of enhancing the effectiveness of service delivery and investment into bulk infrastructure in the region. Graph 7 displays the distribution of access to water in. Graph 7 Source of Water in Quarter 2 (2011) 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) has the highest occurrence of water within the dwelling of 27.4% of the population, with the district average of almost 17% of the population. Again, Ndwedwe and are lagging behind with only 5.2% and 5.9% of their respective populations having access to water within their dwelling. A large portion of the district population (20.3%) still use a dam, river, stream or spring for water, with the largest Page 15

16 House or brick structure on a separate stand or yard Traditional dwelling/hut/structure made of traditional materials Flat in a block of flats Town/cluster/semi-detached house (simplex, duplex or triplex) House/flat/room, in backyard Informal dwelling/shack, in backyard Informal dwelling/shack, not in backyard (informal settlement) Room/flatlet not in backyard but on a shared property Other/unspecified/NA District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 contributing local municipalities being Ndwedwe (36.7%) and (55.5%). Graph 8 displays the final socio-economic indicator, namely the type of dwelling occupied by the respective populations. Graph 8 Type of Dwelling in Quarter 2 (2011) 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) 38% of the district population live in a brick structure on a separate stand, i.e: a formal house structure. The largest contributor to this is (50% of the population) and Mandeni (42% of the population), with Ndwedwe and only contributing 26% and 21% respectively. About 32% of the district population lived in a traditional dwelling made from traditional materials, of which Ndwedwe and were the largest contributing populations (49.7% and 69.3% respectively). About 9% of the population lived in an informal dwelling or shack, with contribution from 15.1% of the Mandeni population, and 12.4% of the population. This could be explained by the negative population growth rates for Ndwedwe and, where people have moved into informal dwellings in and Mandeni in search of employment. Key Findings: Ndwedwe and are lagging behind the district with regards access to electricity; Less than 30% of the district population have access to a flush or chemical toilet; Less than 17% of households have access to water inside their dwelling; Only 9% of the district population live in informal settlements. Page 16

17 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter Employment, Education and Skills This section moves onto access the employment, and education and skills levels of the district and local municipalities, which will provide an understanding of the current labour force within. Graph 9 provides a picture of the current employment environment in the district and local municipalities. Graph 9 Employment Status in Quarter 2 (2011) 400, , , ,000 Mandeni 200, , ,000 50,000 0 Population - Working age (16-65 years old) Employed - Formal and informal Unemployed Not economically active Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Over 60% of the district population, as well as Mandeni, and Ndwedwe fall within the working age bracket of years old, with this figure being 54.9% for. This indicates that there is a fairly large labour force within the district. However, in terms of employment, only about 28% of the population was formally and informally employed in quarter 2 of 2011, with this figure being as low as 12% for. The percentage of unemployed people is low, with between 3% and 12%, however this does not give a true reflection of the current employment situation due to the high number of not-economically active persons. For all municipalities the percentage of not-economically active persons is over 50%, with the district at 64.2% and at 84.8%. This indicates that a very large portion of the workforce has become despondent and is no longer actively seeking employment. In terms of growth in employment, it is important to note that the average quarterly growth rate for the district is -0.44%, which converts into an annualised average growth rate of approximately -1.7%. This indicates that employment is declining at a fairly rapid rate, and again highlights the dire need for investment into the region to create employment opportunities. An interesting observation is that, although having the largest percentage of employment in the district, has experienced the greatest decline in average quarterly growth in the district of -0.71%, a -2.85% average annual decline. Given that is the largest business and retail centre in the district (although Ballito as a town is growing in significance), this is a trend that must be investigated further in order to identify the reasons for Page 17

18 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 this decline. on the other hand, although experiencing the lowest employment rates, has achieved the greatest average annual employment growth in the district of 3.25%, a 0.81% average quarterly increase in employment. Graph 10 displays a picture of the two official definitions of unemployment for the district. The strict definition of employment displays unemployed persons as a percentage of working age population less the not-economically active population. The expanded definition on the other hand displays the number of unemployed AND not-economically active persons as a percentage of the working-age population. Although the strict definition is more common, it omits those who are not employed due to becoming discouraged from seeking work. Additionally, the expanded definition also includes those who are not seeking work such as housewives and students and therefore must be used with a degree of caution. Graph 10 Employment Rate - Strict and Expanded in Quarter 2 (2011) 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Mandeni Ndwedwe Unemployment Rate (Strict) Unemployment Rate (Expanded) Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) In terms of the strict definition of employment, approximately 22% of the district population are unemployed compared with 27% in Mandeni, 16% in, almost 30% in Ndwedwe and 19.9% in. For the expanded definition, due to the large number of not-economically active persons, the unemployment rate is as high 87.8% in, 80.8% in Ndwedwe, and 72% in the district. Graph 11 displays the distribution of formal and informally employed persons. Page 18

19 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 11 Formal and Informal Employment in Quarter 2 (2011) Ndwedwe Mandeni Informaly Employed Formally Employed 0.00% 20.00% 40.00% 60.00% 80.00% % Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) In, about 22% of the working age population are informally employed, while approximately 78% are formally employed. This highlights the significance of the informal economy, not only with, but within the country as a whole. This also identifies the need to provide skills development and training to informal businesses to ensure that they develop the necessary business and financial skills in order to expand and formalise their business. Within the district, all the local municipalities display a similar trend, however with only 15% informal employment displayed in. Graph 12 displays the contribution of each industry to employment in the first quarter Page 19

20 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 12 Employment contribution by Sector for Quarter 2 (2011) 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Employment in the agricultural sector is relatively small with approximately 9071 jobs in quarter 2 of 2011, which translates to 8.9% of total employment in. This sector in Ndwedwe does however contribute to 18.9% of total employment, indicating its significance. Although employment in agriculture is currently less than 10% of total employment in, there is massive potential for the district to expand agricultural production in order to create sustainable employment. Recent initiatives implemented by Enterprise have highlighted the success of agricultural projects in creating sustainable employment and skills development and training, and are expected to kick-start other agricultural projects within the region. Manufacturing is another significant sector within the district, and creates approximately jobs which comprise 16.5% of total employment in the district. This has predominately been driven by activities within the Mandeni and local municipalities, both which have a substantial industrial capacity, contributing 25.4% and 15.5% to total employment respectively. Although the contribution to manufacturing differs substantially, the absolute employment numbers are similar, with 7473 employed in Mandeni, and 7416 employed in. The wholesale, retail, catering and accommodation sector is the largest contributing sector to employment in, accounting for approximately 22% of total employment. This same sector contributes 26%, 23.6%, and 19.7% to total employment in Mandeni, and Ndwedwe respectively. The sector has grown at an average annual rate of 2.6% over since 2000, indicating the strength of the sector. is the economic hub of the distinct and possesses most of the formal retail, wholesale and accommodation facilities within the district, and therefore is the largest contributing municipality with about people employed in the sector. Page 20

21 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A fairly significant sector is that of finance, insurance, real estate, and business services, which contributed 13.8% to total employment in quarter 1 of 2011, which accounts for 14,037 jobs. This same sector contributes almost 25.6% to total employment in Mandeni, 11% in, almost 8% in and just more than 6% in Ndwedwe. This sector has growth relatively well since 2000, with an average annual growth rate of almost 4%. The community, social and personal services sector is another significant sector within the district, contributing 17.3% to total employment in, which consists of about jobs. This sector is the largest contributing sector within the municipality (32.6%) and also contributes 20.8% and 15% to total employment in and Ndwedwe. The sector has experienced an average annual growth rate of approximately 1.75% since The final sector is that of general government, and accounts predominately for employment within the district and local government departments and organisations. This sector contributes 10.8% to total employment in the district, which comprises jobs, and has experienced an average annual growth of about 3.5% since The sector contributes the most to employment in the Ndwedwe and local municipalities, with 15.9% and 31.9% respectively. Graph 13 displays the breakdown of formal employment into the three skills categories. Graph 13 Formal Employment by Skill Level in Quarter 2 (2011) 60.0% 50.0% 40.0% 30.0% 20.0% Highly Skilled Skilled Semi and Unskilled 10.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) It is clear from the above graph that the skills profile of both the district and local municipalities are fairly similar, besides some variation within the Mandeni municipality. In terms of highly skilled individuals, between 10.3% and 13.6% of the formally employed in all municipalities are highly skilled, with 13.6% of those formally employed in Mandeni being highly-skilled. This is predominately due to the industrial development within the Isithebe Industrial Estate which attracts a greater number of highly-skilled workers to the area. Page 21

22 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 In terms of skilled employees, just over 40% of the formally employed district population are skilled persons, with this contribution being a little less in and Ndwedwe due to more semi-skilled and unskilled employees. Graph 14 displays the level of education achieved by the district and local populations as at quarter 1 of Graph 14 Level of Education Received in Quarter 2 (2011) 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Almost 14% of the district population had no schooling, with about 20% of the population also not having any schooling. Less than 10% of the population received a Grade 12, with this figure being only 5.5% for Ndwedwe and 6.3% for. Only 2.8% of the district population received a tertiary education, with the highest bring 5.1% in. Before moving onto an analysis of economic activity, the report provides an assessment of Enterprise projects and the related job creation impact of these projects. Since the inception of Enterprise at the end of 2009, they have funded and managed 13 projects, and are in the process of facilitating another 10 projects. The total direct investment for the Enterprise -funded projects is R54.3 million rand. Calculations done by Enterprise indicate that approximately 1041 direct and indirect jobs have been created during these projects, which include agrihubs, open farms, vineyards and winery, and a biodiesel plant to name a few. The agri-hubs project itself has created 53 jobs, of which 28 are youths, while the vineyards project has created 123 jobs, with 46 of these being youths. Page 22

23 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Key Findings: Over 60% of the district population fall within the working age bracket (16 65 years); Only 28% of the working age population are employed in, with over 63% being not economically-active; 22% of the working-age population are informally employed; Manufacturing ; wholesale and retail, catering and accommodation ; finance, insurance, real estate and business services ; and community, social and personal services contribute almost 70% to those formally employed; Almost 14% of the district population have no schooling, while less than 10% of the population received a Grade 12; Enterprise -funded project have injected R54 million into the local economy, and created approximately 1041 direct and indirect jobs. 2.4 SAARF Living Standard Measure The South African Advertising Research Foundation produces their Living Standard Measure every half year. This data segments the surveyed population into different living standard groups determined by their lifestyle. Table 1 describes the different segments. Table 4 Description of SAARF Living Standard Measures LSM 1 LSM 2 Demographics Female 50+ Some High school Level Achieved Rural: Traditional Hut Female 15 24, 50+ Some High School Rural: Traditional Hut Average household income per month R1 493 Media Radio: Commercial radio; mainly African Language Services (ALS)- Umhlobo Wenene FM, Ukhozi FM General Minimal access to services Minimal ownership of durables, except radio sets R1 732 Same as above Water on plot Minimal ownership of durables, except radio sets and stoves LSM 3 LSM 4 Female15 24, 35-49Up to some high Rural: House/Cluster House/Town House Female Matric Rural: House/Cluster House/Town House R2 052 Same as above + TV: SABC 1 Electricity, water on plot Minimal ownership of durables, except radio sets and stoves R2 829 Same as above + TV: SABC 1,2, ETV Electricity, water on plot, flush toilet, TV sets, hi-fi/radio set, electric hotplates, fridge LSM 5 Male Up to Matric Urban R3 832 Same as above + TV: SABC 1,2,3, E.TV daily/weekly Newspapers, Magazines Electricity, water, flush toilet, TV sets, hi-fi/radio set, stove, fridge Page 23

24 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Demographics Average household income per month Media General LSM 6 Female Up to matric and higher Urban R6 398 Radio: Wide range of commercial & community radio TV: SABC 1,2,3, e.tv Daily/Weekly Newspapers, Magazines Accessed internet 4 weeks Cinema & Outdoor Full access to services Increased ownership of durables plus motor vehicle LSM 7 LSM 8 Female 25+ Matric and higher Urban Female 35+ Matric and higher Urban R9 693 Same as above + TV: Mnet Full access to services Increased ownership of durables plus motor vehicle R Same as above + TV: DSTV Full access to services Full ownership of durables, incl. DVD, PC and satellite dish LSM 9 Male 35+ Matric and higher R Same as above Same as above Urban LSM 10 Male 35+ Matric and higher Urban R Same as above Same as above Source: SAARF Segmentation Tools Presentation, Table 5 on the following page shows the percentage of people within each LSM group that belong to each province. These numbers should be read with caution as they are not representative of the entire population but rather a sample group. This should be seen as a segmentation of the more densely populated areas within each province. This is useful as a measure of Living Standards for areas such as greater Ballito and greater. KwaZulu-Natal contains the highest percentage of LSM 2 people (39.5%). From table 4 above we can see that this is a female headed household, aged and 50+, with some high school level education achieved. This group of people live in huts, earn R1 732 per month, own only radios and stoves and have minimal access to services. In fact, LSM groups 1-4 all feature highly in KZN, along with the Eastern Cape. This shows that KZN has a large amount of people in the denser areas with low Living Standards relative to other provinces. However, as the LSM groups increase, the Eastern Cape does not feature, whereas KZN still remains amongst the top three provinces (along with W.Cape and Gauteng). KZN is unique in this trend which shows that it has the highest level of inequality in Living Standards amongst households in the country. Furthermore, the table shows that proportions of households in the lower LSM groups have increased from June 2010 to December 2010, whereas most of the higher LSM groups have reduced since June This shows that, relative to other provinces, the number of households in KZN in high LSM groups are remaining the same or decreasing, while the number of households in low LSM groups are remaining the same or increasing. This is not a positive trend. Page 24

25 Table 5 Percentage contribution to each LSM group by province Province (% contribution) Date No of Informants Population ('000) W. Cape N. Cape Free State E. Cape KwaZulu- Natal Mpumalanga Limpopo Gauteng North West LSM 1 Jun Dec LSM 2 Jun Dec LSM 3 Jun Dec LSM 4 Jun Dec LSM 5 Jun Dec LSM 6 Jun Dec LSM 7 Jun Dec LSM 8 Jun Dec LSM 9 Jun Dec LSM 10 Jun Dec Source: SAARF Technical Report 2011,

26 2.4 Economic Activity Graph 15 displays the contribution of each industry to total GGP in the second quarter of Real GGP (Nominal GGP less inflation) for the second quarter in was estimated to be approximately R2.672 billion, which consisted of Mandeni (R849 mil), (R1.2 bil), Ndwedwe (R397 mil) and (R178 mil). Agriculture, although only accounting for 9.4% of total GGP in, contributed just over 22% in Ndwedwe, indicating the significance of this sector to the local economy of Ndwedwe. A number of agriculturally-related initiatives have been completed, or recently been implemented by Enterprise within most of the local municipalities, and it is expected that these activities once fully established will enhance the contribution of the agriculture sector within. In addition, opportunities now exist for the export of time-sensitive agricultural products and agri-processing given the establishment of the Dube Tradeport, and future economic development initiative need to identify these opportunities and capitalise on them. Graph 15 GGP for Quarter 2 (2011) 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% Mandeni 10.0% 5.0% 0.0% Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011)

27 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 The most significant sector within the district is manufacturing, contributing 28.5% to total GGP. Manufacturing accounts for 36.5% of the Mandeni economy, 29% of the economy, and 18.7% of the Ndwedwe economy, with manufacturing in only contributing 7.8%. The manufacturing sector in Ndwedwe, although on a small-scale, experienced about 7.5% average annual growth since 2000, with growth in Mandeni declining at -0.5% per annum on average, increasing 2.6% in, and increasing by 2.7% annually on average in. This again highlights the importance of manufacturing in the region, and the need to enhance the capacity of the manufacturing sector in order to create sustainable employment. The close proximity of to Dube Tradeport has opened up numerous opportunities for manufacturers, especially manufacturers of goods for export, and this avenue needs to be further explored and exploited by local manufacturers. Wholesale and retail trade, and catering and accommodation is another significant sector within the district, contributing 15.1% to total GGP in the district. This sector has experienced rapid growth since 2000 (an average of 5.5% per annum), highlighting the importance of this sector within the district. The sector also contributes 15.2% to the Mandeni economy, 16.6% to the economy, and 14.6% to the Ndwedwe economy. Transport and storage, although only contributing 7.2% to the total district GGP, contributed 23.2% to the GGP of, while this sector only contributed about 5% to total GGP in Mandeni, 6.6% in and almost 6.4% in Ndwedwe. This sector achieved modest growth since 2000, with an average annual growth rate of 2.6% for the district. The finance, insurance, real estate and business services sector contributed just under 21% to total GGP in the district, and has experienced substantial average annual growth since 2000 (7.7%). This was primarily driven by the huge growth in this sector within Mandeni, which experienced a 17.4% average annual growth rate, while this sector contributed over 31.7% to the total GGP of Mandeni. This sector also contributed about 18.6% to total GGP in, which has experienced a more modest 3.5% average annual growth since Community, social and personal services only contributed 5.1% to total GGP in, although experiencing a 3.6% average annual growth rate, with this sector contributing 19.2% to GGP in. The general government sector contributed 9.3% to total district GGP, growing at an average annual growth rate of just over 3% since This sector contributes 27.4% to the economy of and has grown at an average annual rate of almost 7% since The next indicator of economic activity under review is that of income and expenditure. Table 6 displays the second quarter household income and expenditure for each of the municipalities, and the breakdown of income into remuneration and unearned income. Page 27

28 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 6: Total Household Income and Expenditure for Quarter (Rm) Rand Millions Mandeni Ndwedwe Total Household Income Remuneration Unearned Income Total Household Expenditure Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Total household income for the first quarter was estimated at R2, 344 billion in, of which 97.6% (R2,287 billion) was used as household expenditure. Of total income, remuneration accounted for 63.4%, whole unearned income accounted for 36.6% of total income. Mandeni and accounted for 32% and almost 40% respectively to total household income in the district, with total expenditure in exceeding total income, indicating that people are spending on credit. has the highest proportion of unearned income, which accounted for over 41% of total household income. This indicates that a relatively large portion of households received grants in, with over a third of households in the district surviving on government grants. Graph 16 displays the contribution of expenditure across the four categories of expenditure for each municipality. Graph 16 Distribution of Expenditure in Quarter 2 (2011) 50.0% 45.0% 40.0% 35.0% 30.0% Durable Goods 25.0% 20.0% 15.0% 10.0% Semi-Durable Goods Non-Durable Goods Services 5.0% 0.0% Mandeni Ndwedwe Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Durable goods comprised about 10% - 11% of total expenditure within all of the municipalities, with semidurable goods comprising between 12% - 17% of total expenditure. The most significant categories of expenditure are non-durable goods and services, which account for between 72% - 77% of total expenditure. Non-durable goods expenditure was the highest in Ndwedwe (39.5% of expenditure), while services contributed 39% to expenditure in Mandeni, almost 46% in, and almost 36% in both Ndwedwe and. This provides some indication of where households within each municipality are spending their money, while graph 17 provides a detailed breakdown of the sub-categories within each main category as a percentage of total expenditure. Page 28

29 Furniture and household appliances Personal transport equipment Recreational and entertainment goods Other durable goods Clothing and footwear Household textiles, furnishings and glassware Motor car tyres, parts and accessories Recreational and entertainment goods Miscellaneous goods Food, beverages and tobacco Household fuel and power Household consumer goods Medical and pharmaceutical products Petroleum products Rent Household services, including domestic Medical services Transport and communication services Recreational, entertainment and education Miscellaneous services District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Clothing and footwear contributed almost 9% to total expenditure in the district, reaching up to 11.6% of total expenditure in, and only 7.2% in. Food, beverages and tobacco is the largest expenditure category contributing 23% to total expenditure in, and as high as 26% of total expenditure in Ndwedwe. Rental contributed 9.3% in the district, with this figure being only 5.3% in, and 6.9% in Ndwedwe. Rentals contributed 8.6% in Mandeni, and almost 12% in. This is expected given that there is more formal, urban accommodation within and Mandeni, and rentals are higher than the other more rural local municipalities. Medical services accounted for approximately 6.9% of total expenditure, and again are slightly more expensive in Mandeni (6.8%) and (7.5%) than Ndwedwe (5.8%) and (6.3%). With regards to transport and communication, this sub-category of expenditure contributed almost 9.5% to total expenditure in, and again accounted for a larger proportion of total expenditure in Mandeni (9.1%) and (10.9%) than Ndwedwe (7.4%) and (7.9%). The final category of significance was miscellaneous services which accounted for approximately 8.5% of total expenditure. This category includes any other services offered within the municipalities that are not indicated in the other service categories. Graph 17 Breakdown of Total Expenditure into Sub-Categories in Quarter 2 (2011) 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Mandeni Ndwedwe Durable Goods Semi-Durable Non-Durable Services Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) Page 29

30 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A final indicator of economic activity that is assessed is domestic fixed capital investment by type and sector. Graph 18 displays the fixed capital investment per municipality for each type of investment. The majority of fixed capital investment has been channelled into machinery and other equipment as well as building and construction works. Investment in machinery and other equipment contributed 54% to capital investment in Mandeni, 49% in, 40% in Ndwedwe and 34% in. Investment into transport equipment was relatively low across the municipality except in, where this investment accounted for over 32% of total capital investment. Transfer costs are at 1.7% of total investment cost for the district, with transfer costs accounting for more than double that (3.5%) in Mandeni. Graph 18 Domestic Fixed Capital Investment by Type in Quarter 2 (2011) 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% Mandeni Ndwedwe 0.0% Buildings and construction works Machinery and other equipment Transport equipment Transfer costs Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) In terms of real average growth since 2000, the district as well as Mandeni and municipalities only experienced a 2-4% increase in average annual growth of fixed capital investment, while Ndwedwe and experienced 6% and 8% average annual growth respectively. Graph 19 displays the breakdown of capital investment into the various sectors within. Page 30

31 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 19 Domestic Fixed Capital Investment per Industry in Quarter 2 (2011) 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade, catering and accommodation Transport, storage and communication Finance, insurance, real estate and business services Community, social and personal services Source: Urban-Econ Estimates based on Quantec s Standardised Regional Dataset (2011) From the above graph it is clear that domestic fixed investment in has been predominately channelled into the manufacturing, transport, storage and communications, as well as finance, insurance, real estate and business services sectors. However, within the local municipalities the situation varies according to the comparative advantages of that municipality. 17.5% of investment within Mandeni was in the finance sector, 38% into manufacturing, while investment into transport and storage contributed just over 12%. Within 10.9% of investment was into agriculture, 29% into manufacturing, 12.8% into transport and storage and 13.5% into finance. Investment in Ndwedwe was more evenly distributed between the sectors, with agriculture (17.5%), manufacturing (15.3%), electricity, gas and water (13.8%), transport and storage (19%) and general government (10.7%) all contributing substantially. In, investment was dominated by the transport, storage and communication sector (47%) and the general government sector (almost 17%). Table 7 Percentage contribution to GDP 2010 % contribution to GDP Manufacturing Personal and General Government Services Agriculture, forestry and fishing Wholesale & retail trade; hotels & restaurants Finance, real estate and business services Tress index 2010: 51.1 Tress index 2008: 52.9 Tress index 2006: 53.4 The tress index measures the diversity of a particular economy on a scale of 0 (completely diverse) to 100 (completely concentrated). Page 31

32 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Transport, storage and communication 6.73 Construction 2.80 Electricity, gas and water 1.95 Mining and quarrying 0.67 Source: KwaZulu-Natal Treasury, IGR Unit, Indicators The tress index for in 2010 is 51.1 which means the economy of is slightly concentrated and would be vulnerable to economic shocks. The tress index is not very high, however, and should not be a reason for concern as long as the manufacturing sector remains diverse within itself. It is promising that since 2006 the tress index has been slowly but steadily decreasing - this shows that the economy is becoming more diverse. Table 8 Employment Location Quotient for Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale & retail trade; hotels & restaurants Transport, storage and communication Finance, real estate and business services Personal and General Government Services Source: KwaZulu-Natal Treasury, IGR Unit, The KwaZulu-Natal Economy, A Risk and Conditions Monitor, Update1 LQ<1 Employment for in this industry is less than expected when compared to SA LQ=1 Employment for in this industry is the same as employment for this industry in SA LQ>1 Employment for in this industry is greater than expected when compared to SA Most location quotients are less than 1 indicating that is employing proportionately less people per industry than the rest of South Africa. This is especially true of the Electricity, gas and water industry (0.41) and the wholesale and retail trade, hotels and restaurant sector (0.52). This means that employment in those industries has potential to grow, it also means that does not have a comparative advantage in these sectors. The location quotient for the Agriculture, forestry and Fishery sector is 3.63 which shows that employment in this sector in is proportionally much higher than the rest of South Africa. Shocks to that industry would result in substantial employment loss for the municipality. This is true also of the manufacturing industry which has a location quotient of Page 32

33 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Shift-Share analysis: National Share: Refers to the change in s employment (growth) that can be attributed to the total change in employment in South Africa. It represents the affect of the economic environment in South Africa on. Industry Mix: This refers to the change in s employment that can be attributed to the change in employment of specific industries in South Africa. It represents the affect of South Africa s high or low growth industries at any specific time on. Regional Shift: This refers to the change in s industry employment that can be attributed to factors unique to s economy. It compares employment growth in a specific industry in to the employment growth of that same industry in South Africa. It therefore shows where has the competitive advantage by showing which local industries are growing at a faster rate than South African industries. Graph 20 Shift-Share Analysis for 2, , , , National Share Regional Shift Industry Mix Total Employment Change , , , , Source: KwaZulu-Natal Treasury, IGR Unit, Indicators As we can see from the above graph, 2009 was a low point for employment in. This drop in employment can be explained by the national state of the economy (due to the similar drop in national share index), which can in turn be explained by the global economic crisis. Interestingly, relative to national industry decline, s industries faired quite well which shows that the factors unique to protected growth in the local economy from the economic downturn. However, this is a double edged sword for when it comes to the recovery that South Africa has been experiencing in 2010/2011, has yet to catch up with national growth in employment figures. Page 33

34 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 9 Shift Share analysis for by industry 2009/2010 National Share Industry Mix Regional Shift Change in employment Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale & retail trade; hotels & restaurants Transport, storage and communication Finance, real estate and business services Personal and General Government Services Source: KwaZulu-Natal Treasury, IGR Unit, Indicators Graph 21 Shift-Share analysis for by industry 2009/ National Share Industry Mix Regional Shift Change in employment Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale & retail trade; hotels & restaurants Transport, storage and communication Finance, real estate and business services Personal and General Government Services Source: KwaZulu-Natal Treasury, IGR Unit, Indicators It is clear from the graph that Agriculture and Manufacturing are the two sectors which enjoy a comparative advantage in as they have grown at a better rate over the 2009/2010 period than their national Page 34

35 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 counterparts. Although these sectors have experienced a negative change in employment, this has been due to external factors. The health of these industries in is relatively very good and therefore investment should be directed into these two sectors. The fact that the main lagging industry is Government Services is perhaps not such a bad thing as it shows that growth in the economy is becoming less dependent on government spending than other municipalities in South Africa. Other lagging industries include trade and finance which have also endured negative growth. Although this negative growth partly reflects the economic environment in South Africa it is also partly due to unique factors within s economic environment which shows that is not an economy with a comparative advantage in trade and financial services. Table 10 Quarterly trends in vehicle sales South Africa Source: NAAMSA Quarterly Review, 1 st Quarter While there was a slight decline in the sale of passenger cars and heavy commercial vehicles in Quarter 1, sales are significantly higher in quarter 1 of 2011 compared to quarter 1 of 2010 which shows a positive trend. The table below shows the total number of vehicle registrations per licensing district. This is a direct reflection on sales in these areas. Ndwedwe has the least amount of people who own vehicles in the area (362) and Mapumulo (737), while double that of Ndwedwe, still falls far shy of Stanger which has over vehicle registrations. From the table we can see that the registration of vehicles dipped in Quarter 1 but is on the rise again in Quarter 2. This shows that people have disposable income and reflects a good economic environment. Page 35

36 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 11 Total number of vehicle registrations per licensing district Total Source: Heavy Load Vehicle (GVM>35 00kg,not to draw) Heavy Load Vehicle (GVM>35 00kg,equ p to draw) Light Load Vehicle (GVM 3500kg or less) Heavy passeng er mv (12 or more persons) Light passeng er MV(less than 12 persons) Minibus Motorcyc le/motort ricycle/q uadrucyc le Special Vehicle Unknown Mapumulo Jan Feb March April May Ndwedwe Jan Feb March April May Stanger Jan Feb March April May Page 36

37 Graph 22 Total Airport Passenger Movements 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , ,000 King Shaka International Airport OR Tambo International Airport Cape Town International Airport 400, ,000 0 Q Q Q Q Q Q Q Q Q Source: KZN Treasury statistics for KZN (June 2011) King Shaka International Airport is situated just south of DM. It would transport a large amount of visitors to and is a good indication of general economic activity in the area. 388,550 Passengers move through King Shaka International Airport monthly on average, in comparison to 1,515,452 passengers monthly at OR Tambo and 663,674 passengers monthly at Cape Town International. While it is the smallest of the international airports in terms of passenger movements it is experiencing the highest monthly average growth rate of 0.66%. Quarter 2 has seen an increase average monthly passenger movement from 399,209 in quarter 1 to 414,446 passengers in quarter 2. Graph 23 Port movements for Durban and Richards Bay 50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% Richards Bay Durban 10.00% 5.00% 0.00% Total Cargo Handled (metric tonnes) Total Number of Vessels Gross Tonnage of Vessels Source: KZN Treasury statistics for KZN (June 2011) *information for June not available Graph 21 shows the port movements for Durban and Richards Bay as a percentage contribution to total South African port movements. As evident on the graph, Richards Bay and Durban contribute approximately

38 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter % of all port movements in South Africa. This is economically significant for because is situated between these two ports (although neither fall within the borders) and therefore, the activity of these two ports is a good gage of economic activity in the area in general. Numbers have remained constant over the last two years over all indicators and both ports (including South Africa in total). Table 12 Port movements for Quarter 1 and Quarter 2 Total Cargo Handled per month (metric tonnes) Total Number of Vessels per month Gross Tonnage of Vessels per month Richards Bay Q1 6,857, ,204,828 Richards Bay Q2 6,372, ,594,865 Durban Q1 3,517, ,519,174 Durban Q2 3,395, ,657,032 South Africa Q1 16,904, ,720,196 South Africa Q2 16,457, ,364,038 Source: KZN Treasury statistics for KZN (June 2011) *information for June not available Table 8 shows the average monthly figures for Quarter 1 in comparison to the average monthly figures in Quarter 2. The figures in red show a decrease from quarter 1 to quarter 2 and the figures in green show an increase. Richards Bay has experienced a decline in port movements this quarter across the board. All ports have shown a decrease in the Total Cargo Handled this quarter. Durban moved 11 more vessels this quarter than last quarter. Page 38

39 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 24 FNB House Price Index Real and Nominal growth as of June 2011 Source: FNB Property Barometer, June 2011 The FNB House Price Index for June shows a slight increase to 2.6% in year-on-year growth which is thought to be due to the last interest rate reduction in November However, real house prices have declined year-on-year at a rate of -2.5% which is due to CPI still being much higher than property price growth. Graph 25 FNB Average House Price Index The average house price for residential property recorded in June 2011 is R805,795. In real terms, the average house price index reached a high of in January 2008 and has retracted to a much lower in May Therefore, the average house price index is 15% lower than it was three years ago. Source: FNB Property Barometer, June 2011 Page 39

40 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 26 FNB valuers residential market strength index FNB valuers residential market strength index shows a slight improvement in market balance as of June 2011 but overall the index still shows a heavily unbalanced market in favour of supply. This explains the decline in real prices and dampens expectations of house price index growth in the near future. Source: FNB Property Barometer, June 2011 Graph 27 Activity level by income for Quarter Source: FNB Property Barometer, Estate Agent Survey Segment, Quarter 2 The activity level is determined by surveying a selection of Real Estate Agents who are asked to put the area they survey into the following income brackets: High net worth (average price 2.68m), Upper Income (average price 1.8m), Middle income (average price 1.21m) and Lower Income (average price 599,000). They are then asked to rate demand for their area out of 10. All four segments are down this quarter with high net worth agents being less optimistic than the other three while lower income agents are most positive about demand in their area. Page 40

41 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Key Findings: Manufacturing accounted for over 28% of total GGP in, with finance, insurance, real estate, and business services accounting 21%, and wholesale, retail, catering and accommodation accounting for just over 15%. 63.4% of total income is remuneration, while the remaining 36.6% is unearned, government grants. Durable goods contribute 10.6% to total expenditure, while semi-durable goods contribute 13.8%, non-durable goods contribute 34.7%, and services contribute 41%; Clothing and footwear, food, beverages and tobacco, rent, medical services, and transport and communications are the largest expenditure categories within the district; Over 81% of domestic fixed investment was into building and construction and machinery and other equipment; and The majority of fixed investment was into the Manufacturing, transport, storage and communications, and finance, insurance, real estate, and business services sectors. The location quotient for is less than 1 for all industries except Agriculture and Manufacturing which shows that these are areas of comparative advantage. The shift-share analysis for further exacerbates that enjoys a comparative advantage in Agriculture and Manufacturing. Car sales throughout South Africa are on average 25% higher in quarter than in Quarter Vehicle registration are growing again as of Quarter after have decreased in Quarter ,550 Passengers move through King Shaka International Airport monthly on average, at a 0.66% average monthly growth rate. Richards Bay and Durban contribute approximately 60% of all port movements in South Africa. The total amount of cargo handled this quarter has declined across ports in comparison with last quarter. Real house prices are relatively low and markets have excess supply which is keeping the downward prices on houses. Estate agents surveyed suggest that demand is higher in low income brackets. 2.5 International Trade International trade statistics provide an indication of how well the district municipality has fared in comparison to other districts within the province in terms of exports, as well as an assessment of the specific items exported by the district. Table 9 displays the percentage growth in exports from for each district, as well as the percentage contribution of that district to total provincial exports in the second quarter Page 41

42 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 13 Total Exports per District Percentage Growth ( ) Percentage contribution of total provincial exports (Q2 2011) Ugu District municipality 10.67% 0.22% UMgungundlovu District municipality 10.63% 10.49% Uthukela District municipality 18.02% 0.94% Umzinyathi District municipality 24.57% 0.58% Amajuba District municipality 9.41% 1.23% Zululand District municipality 40.04% 0.04% Umkhanyakude District municipality 45.51% 0.04% Uthungulu District municipality 13.90% 39.76% District municipality 3.25% 0.26% Sisonke District municipality 95.78% 0.06% ethekwini Metropolitan 4.10% 46.38% Source: Urban-Econ Estimates based on Quantec s National Trade Indicators (2011) only contributed 0.26% to total provincial exports in the province. Exports originating from had grown fairly rapidly between with an average annual growth rate of 8.76%. This indicates the potential of the district to take advantage of export-oriented opportunities, especially since the inception of the King Shaka International Airport and Dube Tradeport and the agricultural and manufacturing potential of the district. However, exports declined quite dramatically in 2010 from R581 million to R167 million which reduced the average annual growth rate to figures similar to those experienced up to Table 10 shows the percentage growth in exports per HS coded export item in along with the percentage contribution of each item to the total exports in Quarter 2, Table 14 Percentage Growth and Contribution of each HS Coded Export Item in HS Code Percentage Growth ( ) Percentage contribution (Q2 2011) Live animals, animal products 2.6% 0.64% Vegetable products -20.7% 1.35% Animal or vegetable fats & oils & their cleavage products; prepared edible fats; animal & vegetable waxes 11.6% 0.14% Prepared foodstuffs; beverages, spirits & vinegar; tobacco & manufactured tobacco substitutes 22.7% 3.92% Mineral products 23.1% 2.73% Products of the chemical or allied industries -24.7% 0.24% Plastics & articles thereof; rubber & articles thereof 10.3% 11.34% Raw hides & skins, leather, furskins & articles thereof; saddlery & harness; travel goods, handbags & similar containers; articles of animal gut (other than silkworm gut) 14.8% 0.05% Wood & articles of wood; wood charcoal; cork & articles of cork; manufactures of straw, of esparto or of other plaiting materials; basketware & wickerwork -6.6% 0.39% Pulp of wood or of other fibrous cellulosic material; waste & scrap of paper or paperboard; paper & paperboard of paper or paperboard; paper & paperboard & articles thereof 4.2% 8.09% Textiles & textile articles -6.1% 1.62% Footwear, headgear, umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops & parts thereof; prepared feathers & articles made therewith; artificial flowers; articles of human hair 70.4% 1.34% Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass & glassware -18.1% 0.26% Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with Page 42

43 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 HS Code precious metal & articles thereof; imitation jewellery; coin Percentage Growth ( ) Percentage contribution (Q2 2011) Base metals & articles of base metal 10.0% 22.99% Machinery & mechanical appliances; electrical equipment; parts thereof; sound recorders an reproducers, television image & sound recorders & reproducers, & parts & accessories of such articles 2.1% 7.93% Vehicles, aircraft, vessels & associated transport equipment 9.6% 34.32% Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments & apparatus; clocks & watches; musical instruments; parts & accessories thereof 4.0% 0.11% Arms & ammunition; parts & accessories thereof Miscellaneous manufactured articles 15.6% 2.54% Works of art, collectors' pieces & antiques -42.8% 0.00% Other unclassified goods Special classification of original equipment components/parts for motor vehicles Source: Urban-Econ Estimates based on Quantec s National Trade Indicators (2011) The most significant exports that originated from were vehicles, aircraft, vessels and associated transport equipment which contributed 34% in the second quarter of 2011, as well base metals and articles of base metal with 23% of total exports, and Plastics & articles thereof, rubber &articles thereof with (11%). The Footwear, headgear, umbrellas, sun umbrellas, walking-sticks...etc sector experienced a very large average annual growth rate over the period of over 70%, with the mineral products category experiencing 23% average annual growth in exports; and exports of prepared foodstuffs, beverages, spirits & vinegar, tobacco & manufactured tobacco substitutes growing at an average annual growth rate of 22.7%. Noticeably, products of chemical or allied industries and vegetable products have experienced a negative growth rate of 25% and 21% respectively. These were large export sectors, particularly products of chemical or allied industries, and their decline is largely to blame for the total drop in exports in over the last year. Table 11 shows the contribution of each District to the total imports for KwaZulu-Natal and each s average annual growth in total imports from Table 15 Total imports per District Percentage Growth ( ) Percentage contribution of total provincial imports (Q2 2011) Ugu District municipality 16.14% 0.73% UMgungundlovu District municipality 14.99% 8.06% Uthukela District municipality 13.13% 1.46% Umzinyathi District municipality 3.92% 0.07% Amajuba District municipality -0.21% 0.22% Zululand District municipality 10.66% 0.03% Umkhanyakude District municipality % 0.00% Uthungulu District municipality 13.62% 9.47% District municipality 13.43% 1.59% Page 43

44 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Growth ( ) Percentage contribution of total provincial imports (Q2 2011) Sisonke District municipality 24.32% 0.01% ethekwini Metropolitan 15.26% 78.35% Source: Urban-Econ Estimates based on Quantec s National Trade Indicators (2011) contributed 1.59% to total imports in Quarter 2. This makes the 4 th largest contributor which is interesting considering it is the smallest District. Imports for are also growing steadily at 13.43% per year on average. Table below provides further detail on this trend. It shows the breakdown of imports within by HS coded item. Table 16 Growth and Contribution of each HS Coded Import Item in HS Code Live animals, animal products Percentage Growth ( ) Percentage contribution (Q2 2011) -8.8% 0.00% Vegetable products 4.5% 6.93% Animal or vegetable fats & oils & their cleavage products; prepared edible fats; animal & vegetable waxes 51.2% 2.00% Prepared foodstuffs; beverages, spirits & vinegar; tobacco & manufactured tobacco substitutes 26.3% 0.53% Mineral products -13.6% 0.16% Products of the chemical or allied industries -0.6% 1.34% Plastics & articles thereof; rubber & articles thereof 11.3% 6.98% Raw hides & skins, leather, furskins & articles thereof; saddlery & harness; travel goods, handbags & similar containers; articles of animal gut (other than silkworm gut) 6.0% 0.22% Wood & articles of wood; wood charcoal; cork & articles of cork; manufactures of straw, of esparto or of other plaiting materials; basketware & wickerwork 10.1% 0.82% Pulp of wood or of other fibrous cellulosic material; waste & scrap of paper or paperboard; paper & paperboard of paper or paperboard; paper & paperboard & articles thereof 3.2% 2.42% Textiles & textile articles 37.8% 25.43% Footwear, headgear, umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops & parts thereof; prepared feathers & articles made therewith; artificial flowers; articles of human hair 35.4% 0.46% Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass & glassware -4.9% 0.20% Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal & articles thereof; imitation jewellery; coin -20.2% 0.00% Base metals & articles of base metal 22.2% 8.33% Machinery & mechanical appliances; electrical equipment; parts thereof; sound recorders an reproducers, television image & sound recorders & reproducers, & parts & accessories of such articles 11.9% 34.68% Vehicles, aircraft, vessels & associated transport equipment 67.5% 1.34% Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments & apparatus; clocks & watches; musical instruments; parts & accessories thereof Arms & ammunition; parts & accessories thereof 13.9% 2.10% Miscellaneous manufactured articles 49.3% 6.05% Works of art, collectors' pieces & antiques -12.2% 0.00% Other unclassified goods 0 0 Page 44

45 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Special classification of original equipment components/parts for motor vehicles 0 0 Source: Urban-Econ Estimates based on Quantec s National Trade Indicators (2011) mostly imports items within the Machinery & mechanical appliances; electrical equipment and parts thereof section (34.7% contribution) and the textiles section (25.4% contribution). Imports within these two categories are also growing steadily at 11.9% and 37.8% respectively. There is perhaps potential here for import substitution, or to encourage the purchase of local produce within these categories. The highest growing categories are the vehicles, aircraft, vessels & associated transport equipment category at 67.5% and the animal & vegetable fats and oils and their cleavage products category at 51.2%. Table 17 Gross Geographic Expenditure Gross Geographic Expenditure (2010) = total exports (2010) total imports (2010) R167,494,901- R1,115,186,789 -R947,691,888 Gross Geographic Expenditure (2 nd Quarter) = total exports (2 nd Quarter) total imports (2 nd Quarter) R43,235,886 - R316,240,363 -R273,004,476 Source: Urban-Econ Estimates based on Quantec s National Trade Indicators (2011) Table 13 gives a summary of trade in. In 2010 experienced a deficit of R947,691,888 and in Quarter 2 of 2011 a deficit of R273,004,476. Although these figures should be treated with caution as they are only approximates, these are large deficits and suggest s imports far outweigh their exports. Investment should be steered towards boosting local produce for export and encouraging purchasers to buy local produce in order to encourage import substitution. Key Findings: Products that originate from contribute 0.26% to total provincial exports; Growth in exports has been 3.25% per annum between but has declined dramatically over the last year; The most significant exports that originated from were vehicles, aircraft, vessels and associated transport equipment which contributed 34% in the second quarter of 2011 contributed 1.59% to total imports in Quarter 2 and Imports for are growing steadily at 13.43% per year on average; mostly imports items within the Machinery& mechanical appliances; electrical equipment and parts thereof section (34.7% contribution) and the textiles section (25.4% contribution); In 2010 experienced a deficit of R947,691,888 and in Quarter 2 of 2011 a deficit of R273,004,476; Page 45

46 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter Tourism Table 18 Overview of KZN tourism market 2009 Foreign Visitors Domestic Visitors Number of Visitors Annually million 8.8 million trips Average Spend per Visitor R7 215 spend R720 per trip Total Market Value R8.75 billion R6.34 billion Average Length of Stay 6.5 nights 4.3 nights Main Source Markets Source: SAT 2010 UK, USA, France, Germany, Netherlands KZN, Gauteng Graph 28 Destinations visited in KZN 2009 (percentage contribution) 40% 35% 30% 25% 20% 15% 10% 5% 0% Overseas and African Air Departures Domestic Tourists Source: SAT 2010 From the above graph it is clear that Durban Metro, the North Coast and Elephant Coast attract a higher proportion of overseas visitors than domestic visitors. These areas will all impact on the tourism market of due to their close proximity. There is an opportunity to harness the benefits of these overseas visitors whose expenditure, length of stay and market value are all higher than domestic tourists (as we can see from table 18 above). The North Coast and Elephant coast could do more to attract domestic visitors, as they are amongst the bottom three destinations visited by domestic visitors. 2.7 Business Confidence The business confidence index is not available on a provincial or local level currently and therefore the report will make use of the national index as an indication of confidence in the entire private sector. The report has used two indexes, one produced by SACCI based on market data and one produced by BER/RMB based on survey data. Both together give a good idea of business confidence in South Africa. On both indices it is clear that business confidence has declined on average from 2005 to The drop in confidence over the period reflects the uncertainty of business during the global economic downturn. Page 46

47 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 19 SACCI BCI Quarter 2 (2011) Source: South African Chamber of Commerce and Industry Business Confidence Index (June 2011) While business confidence was up in the first quarter, it has decreased in the second quarter from 88.3 to 86.8 and BCI is only two points higher in June 2011 as compared to June 2010 (84.8) which shows that while business confidence is returning, it is not nearly as positive as we would hope. Graph 29 BER/RMB Business Confidence Index Quarter 2 Source: Bureau for Economic Research (BER) and Rand Merchant Bank (RMB) press release June The BER/RMB business confidence index has also shown a decline in confidence from 55 in quarter one to 48 in quarter two. A figure of 48 means that around half the surveyed participants are dissatisfied and around Page 47

48 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 half are satisfied with prevailing business conditions. Similarly to the SACCi index, this quarter 2 figure is higher than that of quarter 2 last year. Table 20 Percentage change of economic activity per sector in KZN over the last year, month and quarter Source: Trade and Investment KZN The Business Barometer for the Province of KwaZulu-Natal, April 2011 The Business Barometer for KZN, developed by Mike Schussler from Economists.com, represents the level of economic activity within each sector in KZN. What follows is a brief summary of his report. KwaZulu-Natal has been one of the best performers in economic growth over the last year, growing by 10.8% as of April Despite this, most sectors are still not at the same level as they were 3years ago showing that a full recovery after the global economic crisis has still not been made. The construction sector grew at 20.6% last quarter, KZN is the only province showing positive growth in this sector. Both the mining and electricity sectors are showing a negative yearly growth trend. Electricity rates could be causing a lack of demand which in turn is affecting the strength of the mining industry. The manufacturing sector is the single biggest contributor to the KZN economy and is showing good consistent growth. The textile, clothing, leather and footwear sector has, however, been declining month on month over the last year. This decline is being offset by strong growth in other sectors, particularly the motor vehicles part and accessories sector. Although the Finance, Real Estate and Business Services index is still down on three years ago, it is showing a high yearly growth of 15.6%. Largely driven by high growth in communications, the Transport and Communications sector is showing a record growth of 19%. Agriculture showed a decrease in the first quarter largely due to weather conditions. Government spending is showing a large year on year growth of 15.4%. The monthly decline should be viewed with caution due to year end being in March, although it does seem government spending Page 48

49 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 is slowing which could indicate a positive trend the KZN economy is not so dependent on government spending. The stress index is measured by the negative factors in the economy such as inflation, interest rates and unemployment. Despite all other factors being relatively good in KZN, the stress index still declined by 1.1% in the first quarter due to very high and growing unemployment figures. Economic Risk Risk is calculated using 8 major economic indicators (such as interest rates and inflation rates) factored in with each region s unique economic sector weights. A region is more at risk to negative changes in the major economic indicators if the economy is heavily reliant on certain sectors only. Therefore, risk is a reflection of the economic environment. If the economic environment is improved, economic risk is decreased. The following table describes the contributing factors (variables) to gauging the strength of the economic environment, and hence, economic risk. Table 21 Implications of a change in the economic risk/conditions variables Source: KwaZulu-Natal Treasury, IGR Unit, The KwaZulu-Natal Economy, A Risk and Conditions Monitor, Update1 Table below shows the monthly economic risk for the province, main places within the province and. The table shows that risk in the province (-3.9) and (-3.2) is low and has been decreasing since the beginning of the year. The monitor also suggests that the behaviour of the included economic variables and the structure of the provincial and regional economies are supportive of economic growth. (Clive Coetzee, KZN Treasury) Page 49

50 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Table 22 Economic Risk Monitor Table 21 indicates the following: Positive numbers: High or Increasing risk Zero: Neutral Risk Negative numbers: Low or Decreasing risk Source: KwaZulu-Natal Treasury, IGR Unit, The KwaZulu-Natal Economy, A Risk and Conditions Monitor, Update1 Key Findings: Business confidence has decreased in the second quarter of 2011 Economic risk in the province (-3.9) and (-3.2) is low and has been decreasing since the beginning of the year. 2.8 Enterprise Business Expansion & Retention Survey The B,E&R survey was run by Enterprise in partnership with the Chamber of Commerce, Industry and Tourism over June and July this year in Ballito. Funding was provided by the Industrial Development Corporation (IDC). The survey s intention was to capture what it is like to be in business in the Ballito area and record ideas, concerns, priorities and obstacles to economic growth. Only a selection of the report has been reproduced here. 61 businesses were surveyed, majority were in the Business Park area. Businesses surveyed covered a variety of activities; over 25% are in the finance, insurance, property or business services, 23% are in wholesale retail or motor trade while construction and building formed nearly 20% of the total. Almost all businesses are locally owned. 36% of businesses have been operating for 1-5 years, 31% for 6-10 years, 21% longer than 10years and 12% less than one year. customers are the main source of sales (41%), 31% focus on KZN, while 28% do business throughout South Africa. None see international customers as their primary target. Page 50

51 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter % purchase the bulk of their supplies from within KZN and 22% from other parts of South Africa. Relatively few (17%) can find supplies locally. Majority of business (46%) have increased staff numbers of the last two years and plan to increase staff numbers over the next two years (64%). A large majority of the skills in demand are sales and marketing skills; as well as business and financial management skills. The following graph describes the advantages and disadvantages to locating business in Ballito (advantages in blue and disadvantages in purple). Graph 30 Advantages and disadvantages to locating business in Ballito Source: B,E&R Programme, Results of the Ballito Business Survey, July 2011 Majority of business owners (74%) see quality of life as a key advantage to doing business in Ballito. Other advantages include the image of the area (67%), access to customers (51%) and the local market(41%). The most frequently mentioned disadvantage was the unreliability of electricity supply (49%). Other disadvantages include the lack of municipal support (43%), poor public transport (41%) and expensive rates and services (38%). Page 51

52 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 31 Sales over two years Source: B,E&R Programme, Results of the Ballito Busness Survey, July 2011 The graph shows that 63% of businesses say that sales have increased over the last two years. 85% expect sales to increase which shows that business confidence in Ballito is good. 80% of businesses have not considered selling, moving or closing in the last two years which also shows high business confidence. Business opportunities lie in the fact that there are products in demand locally that are not produced locally such as electrical repairs, quality furniture, IT and computer maintenance, the services of mechanical engineering workshops, packaging, panel beaters, power tools, printing including size A0, general motor vehicle spares, speciality food, wholesale dry goods as well as bakery and supermarket supplies. The following products and services are not purchased locally for price reasons: wholesale cement, cooldrinks, chocolate, dairy products, fish and meat, paper and stationary. When asked what new businesses would succeed in Ballito, suggestions included: artists, authors, electronic traders, cinema, gym, laundry, printers, security equipment supplier and an arts and crafts heritage market in Umhlali, as well as businesses relating to above mentioned products. Restaurants and fast food outlets were mentioned several times. Page 52

53 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Graph 32 Main constraints to expansion Source: B,E&R Programme, Results of the Ballito Busness Survey, July % of businesses consider the small size of the local market the main constraint to expansion. Other constraints include availability of finance (32%), too much competition and problems relating to the municipality (28%). These largely included the poor supply of electricity. Page 53

54 SECTION 3 CONCLUSION 3.1 Key Findings This sub-section pulls together the key findings from each of the previous sub-sections in order to provide a composite understanding of the current social and economic situation in. Demographic Out-migration of residents from Ndwedwe and to more urban-areas such as and Mandeni; has experienced a decline in HIV prevalence of 0.75% per quarter or 3% per annum; Socio-Economic Ndwedwe and are lagging behind the district with regards access to electricity; Less than 30% of the district population have access to a flush or chemical toilet; Less than 17% of households have access to water inside their dwelling; Only 9% of the district population live in informal settlements; Employment, Education and Skills Over 60% of the district population fall within the working age bracket (16 65 years); Only 28% of the working age population are employed in, with over 63% being not economically-active; 22% of the working-age population are informally employed; Manufacturing ; wholesale and retail, catering and accommodation ; finance, insurance, real estate and business services ; and community, social and personal services contribute almost 70% to those formally employed; Almost 14% of the district population have no schooling, while less than 10% of the population received a Grade 12; Economic Activity Manufacturing accounted for over 28% of total GGP in, with finance, insurance, real estate, and business services accounting 21%, and wholesale, retail, catering and accommodation accounting for just over 15%. 63.4% of total income is remuneration, while the remaining 36.6% is unearned, government grants. Durable goods contribute 10.6% to total expenditure, while semi-durable goods contribute 13.8%, non-durable goods contribute 34.7%, and services contribute 41%; Clothing and footwear, food, beverages and tobacco, rent, medical services, and transport and communications are the largest expenditure categories within the district; Over 81% of domestic fixed investment was into building and construction and machinery and other equipment; and

55 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 The majority of fixed investment was into the Manufacturing, transport, storage and communications, and finance, insurance, real estate, and business services sectors. The location quotient for is less than 1 for all industries except Agriculture and Manufacturing which shows that these are areas of comparative advantage. The shift-share analysis for further exacerbates that enjoys a comparative advantage in Agriculture and Manufacturing. Car sales throughout South Africa are on average 25% higher in quarter than in Quarter Vehicle registration are growing again as of Quarter after have decreased in Quarter ,550 Passengers move through King Shaka International Airport monthly on average, at a 0.66% average monthly growth rate. Richards Bay and Durban contribute approximately 60% of all port movements in South Africa. The total amount of cargo handled this quarter has declined across ports in comparison with last quarter. Real house prices are relatively low and markets have excess supply which is keeping the downward prices on houses. Estate agents surveyed suggest that demand is higher in low income brackets. International Trade Products that originate from contribute 0.26% to total provincial exports; Growth in exports has been 3.25% per annum between but has declined dramatically over the last year; The most significant exports that originated from were vehicles, aircraft, vessels and associated transport equipment which contributed 34% in the second quarter of 2011 contributed 1.59% to total imports in Quarter 2 and Imports for are growing steadily at 13.43% per year on average; mostly imports items within the Machinery& mechanical appliances; electrical equipment and parts thereof section (34.7% contribution) and the textiles section (25.4% contribution); In 2010 experienced a deficit of R947,691,888 and in Quarter 2 of 2011 a deficit of R273,004,476; Tourism By far the highest proportion of domestic and overseas visitors choose Durban Metro as their main destination. The Elephant Coast also attracts a lot of overseas visitors while the Drakensberg attracts a large proportion of domestic visitors. Most domestic tourists come from within KZN and Gauteng, while overseas tourists mainly come from the UK and USA. Business Confidence Business confidence has decreased in the second quarter of Economic Risk is low and declining in and the province. Page 55

56 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 ANNEXURE ASSUMPTIONS AND COMPREHENSIVE ECONOMIC INDICATORS The following assumptions were used during this report: The most recent available data down to a local municipal level ends in 2009 or This report therefore assumes that the base year is 2009/2010 (depending in the indicator). In order to determine 2010, 2011 and quarterlydata, the average annual growth rate of each dataset was calculated between either or Data was then extrapolated to 2011 using the above mentioned average annual growth rates, and to each of the quarters of 2011 by using an average quarterly growth rate (annual growth rate divided by 4 quarters). Most data is quoted as a percentage of the total in order to easily compare across varying nominal values for the province, district and local municipalities. For absolute values used within the analysis, in order to determine the quarterly value, the extrapolated 2011 value was divided by 4. The tables below display both the nominal and percentage contribution values for each of the indicators presented in the report. A1.1 Population and Households Mandeni Ndwedwe Population Households Number % growth Number % growth 563, % 134, % 131, % 36, % 172, % 47, % 143, % 29, % 114, % 21, % A1.2 Racial Profile Mandeni Ndwedwe Number Black 509, , , , ,260 Coloured 2, , Asian 38,928 5,769 31,701 1, White 12,083 1,850 9,226 1, Total 563, , , , ,418 Percentage Mandeni Ndwedwe Contribution Black 90.5% 93.6% 75.5% 98.2% 99.9% Page 56

57 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Mandeni Ndwedwe Contribution Coloured 0.5% 0.7% 0.9% 0.1% 0.1% Asian 6.9% 4.4% 18.3% 1.0% 0.0% White 2.1% 1.4% 5.3% 0.7% 0.0% A1.3 HIV and AIDS Number Population HIV Positive AIDS Deaths Percentage Contribution HIV Positive AIDS Deaths Mandeni Ndwedwe 562, , , , ,969 93,273 24,999 26,911 24,563 16,795 6,884 1,813 1,944 1,842 1,284 Mandeni Ndwedwe 16.6% 19.0% 15.7% 16.9% 14.6% 1.2% 1.4% 1.1% 1.3% 1.1% A1.4 Gender Profile Number Male Female Total Mandeni Ndwedwe 272,528 62,575 85,768 72,984 51, ,551 69,299 87,175 70,973 63, , , , , ,418 Percentage Contribution Male Female Mandeni Ndwedwe 48.4% 47.5% 49.6% 50.7% 44.8% 51.6% 52.5% 50.4% 49.3% 55.2% Page 57

58 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A1.5 Age Profile Number Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) 80+ Year(s) Total Percentage Contribution Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) Year(s) 80+ Year(s) Mandeni Ndwedwe 59,687 13,011 17,809 14,736 14,398 61,657 13,237 17,495 16,219 14,983 63,861 14,393 15,079 17,392 17,146 65,298 14,307 17,453 17,987 15,590 59,937 15,016 20,185 14,567 10,164 53,780 14,970 17,117 13,703 7,916 44,295 12,924 15,819 9,741 5,744 33,605 9,274 11,431 7,789 5,067 22,673 5,645 8,216 5,521 3,316 21,324 4,410 8,127 5,542 3,250 19,750 4,011 6,364 5,363 3,997 17,449 3,625 5,653 4,064 4,097 14,325 2,834 5,067 3,800 2,631 10,122 2,014 2,715 3,100 2,278 7,989 1,109 1,986 2,643 2,211 4, ,236 1,247 1,097 3, , , , , , ,600 Mandeni Ndwedwe 10.6% 9.9% 10.3% 10.2% 12.6% 10.9% 10.0% 10.1% 11.2% 13.1% 11.3% 10.9% 8.7% 12.0% 15.0% 11.6% 10.8% 10.1% 12.5% 13.6% 10.6% 11.4% 11.7% 10.1% 8.9% 9.5% 11.3% 9.9% 9.5% 6.9% 7.9% 9.8% 9.1% 6.7% 5.0% 6.0% 7.0% 6.6% 5.4% 4.4% 4.0% 4.3% 4.7% 3.8% 2.9% 3.8% 3.3% 4.7% 3.8% 2.8% 3.5% 3.0% 3.7% 3.7% 3.5% 3.1% 2.7% 3.3% 2.8% 3.6% 2.5% 2.1% 2.9% 2.6% 2.3% 1.8% 1.5% 1.6% 2.1% 2.0% 1.4% 0.8% 1.1% 1.8% 1.9% 0.8% 0.7% 0.7% 0.9% 1.0% 0.6% 0.3% 0.7% 0.6% 0.6% Page 58

59 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A1.6 Energy used for Lighting Number Solar/other/unspecified Electricity Gas Paraffin Candles Total Percentage contribution Solar/other/unspecified Electricity Gas Paraffin Candles Mandeni Ndwedwe 2, ,842 86,107 29,067 40,971 8,376 7, , , ,956 6,947 4,905 19,372 11, ,118 36,942 47,165 29,490 21,696 Mandeni Ndwedwe 2.1% 0.6% 0.7% 1.4% 8.5% 63.7% 78.7% 86.9% 28.4% 35.7% 0.4% 0.5% 0.3% 0.6% 0.4% 2.0% 1.4% 1.7% 3.9% 1.0% 31.8% 18.8% 10.4% 65.7% 54.3% A1.7 Type of Toilet Mandeni Ndwedwe Number Flush or chemical toilet 37,048 12,780 18,020 4,676 1,581 Pit latrine 74,053 20,992 20,653 17,205 15,267 Bucket latrine 1, None of the above 21,284 2,651 7,309 7,108 4,271 Unspecified/Dummy 1, Total 134,840 36,922 47,090 29,496 21,472 Mandeni Ndwedwe Percentage Flush or chemical toilet 27.5% 34.6% 38.3% 15.9% 7.4% Pit latrine 54.9% 56.9% 43.9% 58.3% 71.1% Bucket latrine 1.0% 0.6% 1.3% 1.1% 1.1% None of the above 15.8% 7.2% 15.5% 24.1% 19.9% Unspecified/Dummy 0.8% 0.8% 1.0% 0.7% 0.5% Page 59

60 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A1.8 Water Number Mandeni Ndwedwe Piped water inside dwelling 22,846 7,083 13,018 1,551 1,291 Piped water inside yard 29,548 11,132 8,263 8,450 1,852 Piped water on community stand: distance less than 200m. from dwelling 30,466 8,210 16,124 3,488 2,665 Piped water on community stand: distance greater than 200m. from dwell 14,448 4,611 6,204 2,211 1,424 Borehole/rain-water tank/well 8,489 2, ,686 2,245 Dam/river/stream/spring 27,548 3,064 1,494 10,901 12,118 Water-carrier/tanker/Water vendor 1, Other/Unspecified/Dummy 1, Total 135,904 37,216 47,479 29,725 21,817 Percentage Contribution Mandeni Ndwedwe Piped water inside dwelling 16.8% 19.0% 27.4% 5.2% 5.9% Piped water inside yard 21.7% 29.9% 17.4% 28.4% 8.5% Piped water on community stand: distance less than 200m. from dwelling 22.4% 22.1% 34.0% 11.7% 12.2% Piped water on community stand: distance greater than 200m. from dwell 10.6% 12.4% 13.1% 7.4% 6.5% Borehole/rain-water tank/well 6.2% 7.6% 1.6% 9.0% 10.3% Dam/river/stream/spring 20.3% 8.2% 3.1% 36.7% 55.5% Water-carrier/tanker/Water vendor 0.8% 0.2% 1.5% 0.5% 0.2% Other/Unspecified/Dummy 1.1% 0.5% 1.9% 0.9% 0.8% A1.9 Type of Dwelling Number House or brick structure on a separate stand or yard Traditional dwelling/hut/structure made of traditional materials Mandeni Ndwedwe 51,527 15,588 23,557 7,714 4,677 43,102 8,668 4,893 14,681 14,865 Page 60

61 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Flat in a block of flats 6,908 2,014 3, Town/cluster/semi-detached house (simplex, duplex or triplex) 1, House/flat/room, in backyard 2,588 1, Informal dwelling/shack, in backyard 2, , Informal dwelling/shack, NOT in backyard, e.g. in an informal/squatter settlement 12,590 5,596 5, Room/flatlet not in backyard but on a shared property 2,824 1, Other/unspecified/NA 11,493 1,486 5,167 4, Total 134,922 37,071 47,080 29,545 21,461 Percentage Contribution Mandeni Ndwedwe House or brick structure on a separate stand or yard 38.19% 42.05% 50.04% 26.11% 21.80% Traditional dwelling/hut/structure made of traditional materials 31.95% 23.38% 10.39% 49.69% 69.26% Flat in a block of flats 5.12% 5.43% 8.04% 2.26% 2.12% Town/cluster/semi-detached house (simplex, duplex or triplex) 1.02% 0.44% 1.92% 0.69% 0.59% House/flat/room, in backyard 1.92% 3.25% 1.56% 1.67% 0.73% Informal dwelling/shack, in backyard 1.86% 1.28% 3.40% 0.32% 1.73% Informal dwelling/shack, NOT in backyard, e.g. in an informal/squatter settlement 9.33% 15.10% 12.43% 3.09% 1.37% Room/flatlet not in backyard but on a shared property 2.09% 5.06% 1.25% 0.60% 1.20% Other/unspecified/NA 8.52% 4.01% 10.97% 15.57% 1.21% A1.10 Education Level Number Grade 0/No schooling Grade 1/Sub A Grade 2/Sub B Grade 3/Standard 1 Grade 4/Standard 2 Grade 5/Standard 3 Grade 6/Standard 4 Grade 7/Standard 5 Mandeni Ndwedwe 78,728 14,257 18,561 23,893 22,026 22,462 4,942 6,195 6,253 5,089 25,462 5,933 6,216 7,237 6,085 22,594 4,078 5,780 7,367 5,375 24,249 5,247 7,424 6,801 4,786 27,978 6,359 7,459 8,382 5,782 26,518 5,752 8,079 7,326 5,367 31,881 6,451 11,506 7,142 6,803 Page 61

62 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Number Grade 8/Standard 6/Form 1 Grade 9/Standard 7/Form 2 Grade 10/Standard 8/Form 3/NTC1 Grade 11/Standard 9/Form 4/NTC11 Grade 12/Standard 10/Form 5/Matric/NTC111 Less than matric & certif/dip Certificate with Grade 12 Diploma with Grade 12 Bachelor's Degree Bachelor's Degree and Diploma Honours degree Higher Degree (Master's, Doctorate) Other/Unspecified/NA Total Mandeni Ndwedwe 34,927 8,886 10,347 8,713 6,987 37,689 9,370 11,044 10,618 6,661 37,329 10,177 12,650 9,074 5,433 52,640 16,775 13,041 14,246 8,592 51,510 15,247 21,099 7,965 7,215 6,381 1,141 3,196 1, , , , , , , , , ,713 14,955 21,254 15,599 15, , , , , ,791 Percentage Contribution Grade 0/No schooling Grade 1/Sub A Grade 2/Sub B Grade 3/Standard 1 Grade 4/Standard 2 Grade 5/Standard 3 Grade 6/Standard 4 Grade 7/Standard 5 Grade 8/Standard 6/Form 1 Grade 9/Standard 7/Form 2 Grade 10/Standard 8/Form 3/NTC1 Grade 11/Standard 9/Form 4/NTC11 Grade 12/Standard 10/Form 5/Matric/NTC111 Less than matric & certif/dip Certificate with Grade 12 Diploma with Grade 12 Bachelor's Degree Mandeni Ndwedwe % 10.8% 10.7% 16.5% 19.2% 4.0% 3.7% 3.6% 4.3% 4.4% 4.5% 4.5% 3.6% 5.0% 5.3% 4.0% 3.1% 3.3% 5.1% 4.7% 4.3% 4.0% 4.3% 4.7% 4.2% 5.0% 4.8% 4.3% 5.8% 5.0% 4.7% 4.4% 4.7% 5.1% 4.7% 5.7% 4.9% 6.7% 4.9% 5.9% 6.2% 6.7% 6.0% 6.0% 6.1% 6.7% 7.1% 6.4% 7.3% 5.8% 6.6% 7.7% 7.3% 6.3% 4.7% 9.3% 12.7% 7.5% 9.9% 7.5% 9.1% 11.5% 12.2% 5.5% 6.3% 1.1% 0.9% 1.8% 1.0% 0.6% 0.6% 0.5% 0.8% 0.5% 0.5% 1.0% 0.6% 2.1% 0.6% 0.5% 0.6% 0.2% 1.3% 0.4% 0.2% Page 62

63 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Contribution Bachelor's Degree and Diploma Honours degree Higher Degree (Master's, Doctorate) Other/Unspecified/NA Mandeni Ndwedwe 0.3% 0.3% 0.5% 0.2% 0.4% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.2% 0.1% 0.1% 12.0% 11.3% 12.3% 10.8% 13.9% A1.11 Employment and Unemployment Number Mandeni Ndwedwe Population - Working age (16-65 years old) 353,945 87, ,472 87,842 62,346 Employed - Formal and informal 98,912 27,847 46,796 16,877 7,585 Unemployed 27,898 10,507 9,003 7,041 1,881 Not economically active 227,135 49,001 62,673 63,924 52,880 Percentage Contribution Mandeni Ndwedwe Population - Working age (16-65 years old) 63.3% 66.6% 68.5% 61.9% 54.9% Employed - Formal and informal 27.9% 31.9% 39.5% 19.2% 12.2% Unemployed 7.9% 12.0% 7.6% 8.0% 3.0% Not economically active 64.2% 56.1% 52.9% 72.8% 84.8% Ndwedwe Mandeni Percentage Unemployment Rate (Strict) 22.0% 27.4% 16.1% 29.4% 19.9% Unemployment Rate (Expanded) A1.12 Employment by type and skill level 72.05% 68.1% 60.5% 80.8% 87.8% Ndwedwe Mandeni Number Employed - Formal 77,426 21,822 36,141 13,237 6,426 Employed - Informal 21,774 6,202 10,748 3,693 1,154 Employed - Formal - 8,867 2,972 3,726 1, Page 63

64 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Ndwedwe Mandeni Number Highly skilled Employed - Formal - Skilled 31,541 10,084 13,813 5,053 2,687 Employed - Formal - Semiand unskilled 37,018 8,766 18,602 6,819 2,913 Employed Total 99,604 28,011 47,176 16,963 7,524 Ndwedwe Mandeni Percentage Contribution Formally Employed 78.14% 77.86% 77.22% 78.23% 84.67% Informally Employed 21.86% 22.14% 22.78% 21.77% 15.33% Ndwedwe Mandeni Percentage Contribution Highly Skilled 11.5% 13.6% 10.3% 10.3% 12.9% Skilled 40.7% 46.2% 38.2% 38.2% 41.8% Semi and Unskilled 47.8% 40.2% 51.5% 51.5% 45.3% A1.13 Employment by Industry Number Mandeni Ndwedwe Agriculture, forestry and fishing 9, ,471 3, Mining and quarrying Manufacturing 16,714 7,473 7,416 1, Electricity, gas and water Construction 6, ,838 1, Wholesale and retail trade, catering and accommodation 22,582 7,643 11,287 3, Transport, storage and communication 3, , Finance, insurance, real estate and business services 14,037 7,526 5,302 1, Community, social and personal services 17,581 2,537 9,988 2,624 2,527 General government 10,946 1,584 4,178 2,773 2,480 Total 101,408 29,428 47,914 17,486 7,762 Page 64

65 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Contribution Mandeni Ndwedwe Agriculture, forestry and fishing 8.9% 3.2% 9.3% 18.9% 5.2% Mining and quarrying 0.5% 0.9% 0.4% 0.5% 0.1% Manufacturing 16.5% 25.4% 15.5% 9.2% 3.8% Electricity, gas and water 0.1% 0.0% 0.1% 0.4% 0.1% Construction 6.4% 2.0% 8.0% 11.3% 2.8% Wholesale and retail trade, catering and accommodation 22.3% 26.0% 23.6% 19.7% 5.4% Transport, storage and communication 3.3% 2.9% 2.5% 2.9% 10.3% Finance, insurance, real estate and business services 13.8% 25.6% 11.1% 6.3% 7.8% Community, social and personal services 17.3% 8.6% 20.8% 15.0% 32.6% General government 10.8% 5.4% 8.7% 15.9% 31.9% A1.14 Gross Geographic Product by Industry Rand Millions (2nd quarter) Mandeni Ndwedwe Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade, catering and accommodation Transport, storage and communication Finance, insurance, real estate and business services Community, social and personal services General government Total 2, , Percentage Contribution Mandeni Ndwedwe Agriculture, forestry and fishing 9.4% 3.3% 10.0% 22.2% 5.8% Mining and quarrying 0.8% 1.1% 0.6% 0.8% 0.2% Manufacturing 28.5% 36.5% 29.0% 18.7% 7.8% Electricity, gas and water 0.9% 0.2% 0.7% 3.0% 0.8% Page 65

66 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Contribution Mandeni Ndwedwe Construction 2.9% 0.9% 3.5% 6.0% 1.4% Wholesale and retail trade, catering and accommodation 15.1% 15.2% 16.6% 14.6% 4.3% Transport, storage and communication 7.2% 5.0% 6.6% 6.4% 23.2% Finance, insurance, real estate and business services 20.9% 31.7% 18.6% 9.8% 10.0% Community, social and personal services 5.1% 2.0% 5.2% 4.7% 19.2% General government 9.3% 3.9% 9.0% 14.0% 27.4% A1.15 Income and Expenditure Rand Millions (2 nd Mandeni Ndwedwe quarter) Total Income 2, Remuneration 1, Unearned Income Total Expenditure 2, Percentage Mandeni Ndwedwe Contribution Total Income 100.0% 100.0% 100.0% 100.0% 100.0% Remuneration 63.4% 62.0% 67.0% 60.9% 58.8% Unearned Income 36.6% 38.0% 33.0% 39.1% 41.3% Total Expenditure 97.58% 97.82% % 91.79% 92.23% A1.16 Expenditure by Category Rand Millions (2nd Mandeni Ndwedwe quarter) Durable Goods Semi-Durable Goods Non-Durable Goods Services Total 2, Page 66

67 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Mandeni Ndwedwe Contribution Durable Goods 10.6% 10.2% 10.5% 10.7% 11.4% Semi-Durable Goods Non-Durable Goods 13.8% 14.8% 12.1% 14.3% 16.6% 34.7% 35.9% 31.5% 39.5% 36.5% Services 41.0% 39.2% 45.8% 35.5% 35.6% A1.17 Expenditure by sub-category Rand Millions (2nd quarter) Durable Goods Semi- Durable Non- Durable Services Mandeni Ndwedwe Furniture, household appliances, etc Personal transport equipment Recreational and entertainment goods Other durable goods Clothing and footwear Household textiles, furnishings, glassware, etc Motor car tyres, parts and accessories Recreational and entertainment goods Miscellaneous goods Food, beverages and tobacco Household fuel and power Household consumer goods Medical and pharmaceutical products Petroleum products Rent Household services, including domestic servants Medical services Transport and communication services Recreational, entertainment and educational services Miscellaneous services Page 67

68 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Contribution Durable Goods Semi- Durable Non- Durable Services Furniture, household appliances, etc Personal transport equipment Recreational and entertainment goods Other durable goods Clothing and footwear Household textiles, furnishings, glassware, etc Motor car tyres, parts and accessories Recreational and entertainment goods Miscellaneous goods Food, beverages and tobacco Household fuel and power Household consumer goods Medical and pharmaceutical products Petroleum products Rent Household services, including domestic servants Medical services Transport and communication services Recreational, entertainment and educational services Miscellaneous services Mandeni Ndwedwe 2.46% 2.51% 2.13% 2.74% 3.12% 4.73% 4.55% 4.52% 5.23% 5.33% 2.63% 2.44% 3.16% 1.98% 2.08% 0.74% 0.71% 0.71% 0.80% 0.84% 8.94% 9.92% 7.19% 9.65% 11.60% 2.01% 2.13% 1.70% 2.24% 2.54% 1.28% 1.26% 1.23% 1.38% 1.41% 1.12% 1.01% 1.39% 0.84% 0.79% 0.47% 0.44% 0.65% 0.22% 0.25% 23.06% 23.85% 21.26% 26.04% 23.45% 3.00% 3.46% 1.96% 4.13% 4.01% 4.76% 5.10% 4.36% 4.93% 5.03% 1.30% 1.04% 1.63% 1.18% 1.02% 2.53% 2.41% 2.29% 3.16% 2.94% 9.36% 8.59% 11.95% 6.97% 5.30% 2.49% 2.49% 2.51% 2.51% 2.37% 6.89% 6.80% 7.50% 5.84% 6.31% 9.46% 9.11% 10.93% 7.39% 7.90% 4.27% 4.31% 4.12% 4.18% 4.79% 8.49% 7.86% 8.82% 8.58% 8.91% A1.18 Domestic Fixed Capital Investment by Investment Type Rand Millions (2nd st quarter) Buildings and construction works Machinery and other equipment Mandeni Ndwedwe Transport equipment Transfer costs Total Page 68

69 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Percentage Contribution Mandeni Ndwedwe Buildings and construction works 33.0% 26.9% 33.5% 42.9% 32.7% Machinery and other equipment 48.2% 54.1% 49.1% 40.3% 34.2% Transport equipment 17.2% 15.5% 16.5% 16.0% 32.5% Transfer costs 1.7% 3.5% 0.9% 0.8% 0.7% A1.19 Domestic Fixed Capital Investment by Industry Rand Millions (1 st quarter) Mandeni Ndwedwe Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade, catering and accommodation Transport, storage and communication Finance, insurance, real estate and business services Community, social and personal services General government Total Percentage Contribution Mandeni Ndwedwe Agriculture, forestry and fishing 10.0% 5.6% 10.9% 17.5% 5.0% Mining and quarrying 1.8% 3.2% 0.9% 1.9% 1.0% Manufacturing 28.1% 38.0% 29.1% 15.3% 7.4% Electricity, gas and water 10.1% 7.8% 10.8% 13.8% 6.2% Construction 2.1% 0.7% 2.5% 4.0% 1.0% Wholesale and retail trade, catering and accommodation 9.0% 9.2% 10.1% 8.1% 3.4% Transport, storage and communication 17.5% 12.8% 15.8% 19.0% 47.1% Finance, insurance, real estate and business services 13.5% 17.5% 13.5% 9.0% 7.0% Community, social and personal services 1.0% 0.5% 0.9% 0.9% 5.1% General government 6.9% 4.8% 5.6% 10.7% 16.8% Page 69

70 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 A1.20 Airport Passenger Movements King Shaka International OR Tambo International Cape Town International Richards Bay Jan ,474 1,379, ,777 8,045 Feb ,138 1,294, ,521 8,093 Mar ,244 1,541, ,347 8,122 Apr ,248 1,471, ,799 8,177 May ,712 1,415, ,701 8,195 Jun ,958 1,606, ,907 8,219 Jul ,342 1,571, ,722 8,236 Aug ,934 1,606, ,716 8,249 Sep ,797 1,605, ,168 8,269 Oct ,150 1,680, ,713 8,288 Nov ,454 1,540, ,598 8,299 Dec ,535 1,600, ,783 8,357 Jan ,781 1,507, ,035 5,273 Feb ,166 1,373, ,458 6,371 Mar ,680 1,665, ,929 7,203 Apr ,985 1,590, ,336 May ,906 1,516, ,991 A1.21 Port Movements Total Cargo Handled (metric tonnes) Richards Bay Total Number of Vessels Gross Tonnage of Vessels Total Cargo Handled (metric tonnes) Durban Total Number of Vessels Gross Tonnage of Vessels ,797,601 1,584 56,238,304 41,273,633 4,028 84,251, ,688,419 1,584 56,847,580 40,026,277 3,707 79,970, ,623,684 1,517 57,988,427 40,778,495 3,887 87,589, ,319,200 1,470 56,810,539 43,861,241 4,161 95,085, ,517,409 1,570 57,822,557 41,883,269 4, ,501, ,737,929 1,615 57,090,284 41,578,997 4, ,505, ,086,951 1,843 61,784,777 37,527,690 4, ,207, ,148,039 1,733 61,761,815 41,645,861 4, ,192, ,958,875 1,649 59,530,114 41,623,094 4, ,891,804 May-09 6,716, ,458,807 3,001, ,451,989 Jun-09 6,031, ,416,814 2,948, ,441,580 Jul-09 6,716, ,458,807 3,001, ,451,989 Aug-09 7,345, ,498,003 3,199, ,297,254 Page 70

71 District Quarterly Economic Indicators and Intelligence Report: 2 nd Quarter 2011 Total Cargo Handled (metric tonnes) Richards Bay Total Number of Vessels Gross Tonnage of Vessels Total Cargo Handled (metric tonnes) Durban Total Number of Vessels Gross Tonnage of Vessels Sep-09 5,445, ,342,793 3,674, ,172,682 Oct-09 7,359, ,738,368 2,848, ,277,482 Nov-09 8,310, ,952,691 3,393, ,916,317 Dec-09 6,379, ,845,522 3,863, ,872,380 Jan-10 8,347, ,150,731 3,004, ,574,204 Feb-10 5,575, ,818,691 4,032, ,738,440 Mar-10 7,283, ,145,926 3,132, ,452,495 Apr-10 5,316, ,184,834 2,755, ,710,781 May-10 6,585, ,954,941 3,293, ,562,789 Jun-10 5,856, ,646,809 3,878, ,699,900 Jul-10 6,982, ,595,118 3,327, ,218,950 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 7,296, ,126,674 4,215, ,771,230 6,505, ,778,165 2,792, ,806,039 9,532, ,649,368 3,491, ,506,167 8,418, ,314,159 4,881, ,029,237 7,446, ,396,399 2,840, ,122,089 6,327, ,862,313 2,940, ,435,719 7,271, ,559,062 4,298, ,140,379 6,972, ,193,110 3,312, ,981,423 6,787, ,070,479 3,368, ,434,520 5,957, ,119,250 3,423, ,879,544 Page 71

72 REPORT COMPILED FOR: Enterprise Cnr Link Road and Ballito Drive Ballito, KwaZulu-Natal Tel: Fax: REPORT COMPILED BY: Urban-Econ Development Economists 37 Hunt Road, Glenwood Durban, 4001 Tel: Fax: