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ETHEKWINI STATE OF THE ECONOMY
PRESENTATION TO THE S.D.B. LED STAKEHOLDERS
18 AUGUST 2014
ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION UNIT:
LED AND SPATIAL DEVELOPMENT
Structure of this Progress Presentation
Overview Department Overview Long-term Dev Framework Package of Plans Demographics The Durban Economy Labour Indicators Foreign Trade and
Investment Spatial Economy Summary Majority of data from HSI
Global Insight (2013)
Department Overview
Economic Development and Investment Promotion (H.O.D)
LED & Spatial Development
Policy andResearch
Sector Development
Investment Promotion
Long Term Development Framework
Package of Plans
Demographics
Demographics Cont…
Durban Economy in context
Agriculture1%
Mining0%
Manu-facturing
22%
Elec-tricity
2%
Con-struction3%
Trade17%
Transport16%
Finance22%
Com-munity
ser-vices17%
Sectorial composition of GDP (Main Sectors) in 2013
Main sectors – manufacturing, finance, trade, community services
Total GDP in 2013 = R217.7 billion
Growth over 17 years = 3.7% and 2.6% between 2012 and 2013
Rate not adequate to meet NDP ‘s GDP growth targets – requires growth > 5%.
The Durban economy
Industrial GDP Contribution
GDP growth compared with other regions 1997-2013In 2013, City experienced a positive growth rate of 2.6%, while KwaZulu-Natal and South Africa grew by 3.1% and 1.9%, respectively.
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Average Annual Growth of Top 5 Economies in SA
SA Cape Town Ethekwini Joburg Port Elizabeth Pretoria
Economic Production Indicators cont.
Reasons for decline in secondary sector include: • Increased imports at
cheaper prices especially from Asia.
• Increased cost of land and labour
• Inability of local government to finalise large projects such as the automotive supplier park, , or capitalise on existing such as DTP
Tertiary Sector:• Highest contributors are retail trade, land and water transport, and real estate
activities, • Highest growth sectors are real estate activities and wholesale & commission
trade• Citizens are spending more on real estate. This could be due to the low interest
rates prevailing at the time
Tertiary Sectors -Trade, transport, finance & community services
2010 2011 2012 % change2011-2012
% contribution
Wholesale & commission trade
12,550 14,673 17,16217%
5.9%
Retail trade & repairs of goods
22,464 26,149 29,17112%
10%
Sale & repairs of motor vehicles, sale of fuel
7,316 8,794 10,05914%
3.5%
Hotels & restaurants 2,960 3,050 3,476 14% 1.2%
Land & Water transport 23,624 26,041 27,980 7% 9.6%
Air transport & transport supporting activities 5,031 5,770 5,988
4%
1.8%
Post & telecommunication 8,407 9,182 9,657 5% 2.1%
Finance & Insurance 23,870 25,825 26,013 1% 3.3%
Real estate activities 13,695 14,673 18,954 29% 8.9%
Other business activities 14,212 14,812 14,897 1% 6.5%
Public administration & defence activities
9,755 10,282 11,39111%
5.1%
Education 14,457 15,955 17,312 9% 3.9%
Health & social work 11,914 12,925 13,969 8% 4.8%
Other service activities 11,766 12,761 13,620 7% 4.7%
Primary sector1%
Secondary sector23%
Tertiary sector75%
Economic Production Indicators cont.
• The industries with highest labour remuneration figures in eThekwini were community services (32.8%), manufacturing (22,8%), and wholesale and retail trade(15.1%). This trend has changed slightly with finance and business sector slipping to 4th place in 2012
• Highest growth sectors were community services; transport, storage and communications; wholesale and retail trade, and construction; while the lowest growth sector was the finance and business sector. No sectors experienced negative growth between 2011 and 2012.
• The public sector wage bill is excessive for eThekwini
Labour Remuneration (current prices) 2010 2011 2012 % change2011-2012
% contributio
n
Agriculture, fishing & forestry
1,084 1,101 1,181
7%0.8%
Mining & quarrying 139 149 156 5% 0.1%Manufacturing 28,440 30,785 33,667 9% 22.8%Electricity, water & gas 2,440 2,715 3,023 11% 2.0%Building construction & civil engineering
4,228 4,309 4,658
8%3.2%
Wholesale & retail trade 17,785 20,571 22,318 8% 15.1%Transport, storage & communications
11,392 12,838 13,847
8%9.4%
Financial & business 20,324 21,544 21,819 1% 14.8%Community services 39,905 43,325 46,866 8% 32.8%Total industries 125,738 137,339 147,535 7% 100.0%
Labour Indicators
Total Formal/Informal Employment: Broad Sectors
2012 2013 % Change
1,230,425 1,243,820 1.1%
Agriculture1%
Mining0%
Manufactur-ing21%
Electricity1%
Construc-tion4%
Trade15%
Transport7%
Finance17%
Community Services
24%
Households10%
Big employment sectors – community services, manufacturing and finance
Total formal/informal employment in 2013 = 1,243,820
Growth over 12 years = 2.8%
Growth not adequate to meet NDP targets – requires growth > 4%.
Labour Indicators
Labour Indicators (continued)
• The highest percentage of people unemployed fall within the African population group; whereas the white population are among the least unemployed.
• Most of employment is in trade sector, then community services and manufacturing.
• High growth sectors are agriculture(10.6%) and community services (5.9%) with manufacturing and construction experiencing negative growth
2010 2011 2012 Growth2011-2012
Unemployed 290,823 270,523 280,058 3.5%
African 246,937 229,640 236,674 3.1%
White 5,171 4,722 4,736 0.3%
Coloured 7,164 6,692 6,906 3.2%
Asian 31551 29,470 31,741 7.7%
Employed 1,064,900 1,094,014 1,115,737 2%
Agriculture 11,048 10,678 11,810 10.6%
Mining 377 357 369 3.3%
Manufacturing 198,371 197,812 193,947 -2%
Electricity 4,755 4,655 4,990 7.2%
Construction 72,640 71,923 71,632 -0.4%
Trade 255,548 267,157 270,058 1.1%
Transport 73,782 75,311 78,850 4.7%
Finance 145,987 151,113 153,942 1.9%
Community services 214,752 228,991 242,549 5.9%
Households 87,641 86,015 87,590 1.8%
Informally employed 259,433 269,139 270,325 0.4%
Foreign Trade and Investment
Foreign Trade Overview
.
Merchandise exports from and imports to eThekwini (R thousands, current prices)
• In eThekwini, imports have grown at a faster rate than exports (growth of 9% and 10% respectively), therefore, the trade balance has remained negative, and spiked in 2011 and 2012 due to a large increase in imports driven by renewed local consumer spending.
• Over 60% of all exports are ‘motor vehicles, parts & accessories’ and ‘basic iron & steel’. Almost 50% of imports are ‘motor vehicles, parts & accessories’, and ‘basic chemicals’.
• The majority of exports are destined for African countries and the majority of imports are from Asia. The number one export partner is Japan, while the top import partners are Germany and China.
2006 2007 2008 2009 2010 2011 2012
-100,000,000
-80,000,000
-60,000,000
-40,000,000
-20,000,000
0
20,000,000
40,000,000
60,000,000
-35,000,000
-30,000,000
-25,000,000
-20,000,000
-15,000,000
-10,000,000
-5,000,000
0
Merchandise ExportsMerchandise ImportsTrade Balance
Domestic Fixed Investment Trends (Constant, 2005, Rm)
Total domestic fixed investment in 2011: R48, 1 billion, with a growth rate of 3.8 % year-on-year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas and wa-ter
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
Investment Indicators
Investment IndicatorsDurban Investment Dashboard
Investment IndicatorsDurban Investment Dashboard
Latest Statistics on Dashboard: 57 Projects 3, 736, 674 work
opportunities during construction
617 360 permanent jobs
R8,4bn in rates income 20 year timeframe
Investment IndicatorsDurban Investment Dashboard
Spatial Economy
Share of GDP and Manufacturing per region
West North Central South
GDP 12892571340 37114978100 103335912710 41998527850
10,000,000,000
30,000,000,000
50,000,000,000
70,000,000,000
90,000,000,000
110,000,000,000
GDP per Planning Region: 2013 (Rands)
Comparing Manufacturing sectors amongst top 5 economies
Cape Town Ethekwini Johannesburg Nelson Mandela Bay Tshwane
Primary sector 1586396.3748986 2526130.37650209 4638320.67718388 206591.107682256 1879628.31242221
Secondary sec-tor
42931634.8228883 53100927.9565523 67728193.2023721 16256930.0695726 36664302.2346589
Tertiary sector 158944536.88129 139714931.678542 230146098.112874 41219463.1861043 140716397.042207
25,000,000
75,000,000
125,000,000
175,000,000
225,000,000
Share of Primary, Secondary and Tertiary contribution 2013 (R1000, Constant 2005 Prices)
• EThekwini 2nd most significant manufacturing region• 2nd largest compound annual growth rate in last 10 years
(3.23%). • Tshwane largest growth rate = 3.79% and Johannesburg =
2.63%
Central60%
North26%
South11%
West4%
Total Business rates
Services and Utilities!!
Summary
Challenges and Opportunities
CHALLENGES ????
OPPORTUNITIES SEZ at DTP and significant
development momentum Look at SEZ at
Hammarsdale and Cato Ridge
SIP 2 projects Implementation of the
Economic Development and Job creation Strategy – address a lot of the challenges
DTIs incentives in to grow our manufacturing base.
Inner City Township development ICDG Unlock key projects on
the investment dashboard
Thank youProject Manager: LED and Spatial Development Department
Economic Development & Investment Promotion UnitEThekwini Municipality