Gauteng’s construction and peripheral industries are positioned to experience an "explosion" that would see some R1,2-trillion flowing through the sectors and their extended supply chains, Standard Bank chief economist Goolam Ballim predicated.

This would be a sharp contrast to the R700-million that was spent during the past three years.

The Gauteng Business Barometer (GBB) for April revealed an especially robust construction industry as activity levels remained nearly 20% higher than in the same month last year, he said.

The GBB measures Gauteng’s economic activity on a monthly basis.

“It also places into perspective the contribution of the 2010 Soccer World Cup of between R50-billion and R60-billion to South Africa’s gross domestic product.”

The R1,2-trillion represents a composite figure which includes activity in the extended supply chain of the construction industry, in the residential and commercial fields.

“It also includes production of machinery and equipment. This development will benefit many smaller players as the established names will not be able to attend to all projects,” said Ballim.

Other sectors, however, did not perform as well as the construction industry.

April was probably one of the worst months for Gauteng businesses, Ballim said, explaining that the
GBB for April had slipped to 146,4 index points from 150,4, in March, indicating a 2,7% drop in business activity levels, and a 5,9% decrease when compared to the same month last year.

“The main reason for this is the negative impact of higher interest rates and inflation. Implementation of the eNaTIS system also has an impact. The effect is more severe than we thought would be the case, four or five months ago,” explained Tsec Economist Mike Schüssler.

The economic sectors that performed worse month on month and year on year were the mining and trade sectors. The trade sector, which includes retailers, wholesalers and tourism operators were hit by the effects of the eNaTIS system, resulting in 6,2% decrease in motor vehicle sales,” he said.

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