They are delivering good news.
The good news for consumers and planners within the greater Nelson Mandela Bay area was delivered today by Dr Neal Bruton of RGT Smart during his Nelson Mandela Bay Business Chamber presentation of the newly renamed Nelson Mandela Bay Business Confidence Index. (The NMBBCI used to be known as the Port Elizabeth Business Confidence Index or PEBCI).
If you want to get the NMBBCI hot off the press and with all the supporting raphs and analysis you will have to subscribe by contacting the Nelson Mandela Bay Business Chamber – let’s face it, it always feels so much better to pay for good news, especially when that news may convince your bosses elsewhere to invest more in Port Elizabeth or, maybe even give you that salary increase to match your new found economic insight!
The background to the good news is on the back of USA growth up by 3.1% supported by strong USA retail sales. The 27 countries of the Euro zone are showing some sluggish growth that, at least is not in negative territory. Euro zone growth is being led by a strong German economy keeping overall inflation down to 2.7%.
In the east Japan is reeling from a triple whammy of natural disasters after a 3.9% growth in 2010. To the north, China has revised it’s growth target from 7.5% to 7% as they come to terms with that capitalist disease called inflation in typical hard line central government Chinese fashion.
Africa continues to be bedevilled with conflict contributing to rocketing oil and commodity prices.
Overall the surging oil and food prices have led to a deterioration in the global inflation outlook and an upward momentum in interest rates.
Dr Bruton noted some of the positve influences on the upward trending NMBBCI as:
- A healthier SA Trade Balance.
- Rand strengthening against all currencies citing that; “…. a strengthening rand is linked to lower inflation and a lower prime rate.”
- A shrinking current account deficit.
- Increase in the real personal disposable income of households.
- JSE all share index up above 2008 peak levels.
- Nett household wealth up.
- SA Business confidence up.
- Increase in retail trade sales.
- SARB leading indicators on an upward trend.
On the negative side:
- Personal savings remains negative – as it has done since 2006.
- Credit extension to the private sector still languishing.
A 3.6% Gross Domestic Product growth is still predicted for South Africa in 2011.
The Motor Manufacturing sector is one of the largest contributors to the local economy – along with the East Cape Government which is responsible for 20% of the ecomnomy as a result of government spending.
Some quick facts about the motor indstry:
- In the period 1970 to 2003 the reported sales of motor vehicles per month stayed relatively stagnant at around 20 000 units per month.
- In the period 1994 to 2006 sales grew dramatically on the back of our new democracy and the increase in taxpayers from 1.8 million (in 1995) to 5.8 million (in 2010).
- The recovery after the global financial crisis has been remarkable and beyond all predictions.
- In the period January 2004 to December 2009 2.25 million new vehicles were sold – those vehicles are now reaching the end of their ‘durable’ lives and will need to be replaced.
- New car dealer sales are sharply up.
- One tonner sales are also sharply up – a good indication of economic activity.
- Sales of extra heavy vehicles has astounded predictions and are also sharply up – despite a slump in the construction industry.
- 408 196 passenger vehicle sales are predicted for 2011.
- Close to 70% of all vehicles sold are imported.
- Real vehicle prices are still in negative territory in comparison to previous periods.
With the elections (and increased government spend) around the corner, many events taking place in Nelson Mandela Bay and the bouyant motor vehicle market you can expect the NMBBCI to be on an upward trend – and it is.
Help that upward trend and check your business listing in the MyPE Business Directory or, better yet, contact Janine and book your cost effective targetted advertising on MyPE.
Alan Straton
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