Sat Oct 22 11:03:04 SAST 2016


By unknown | Aug 20, 2008 | COMMENTS [ 0 ]

Tamlyn Stewart, Marcia Klein, Kea' Modimoeng,Zweli Mokgata

Tamlyn Stewart, Marcia Klein, Kea' Modimoeng,Zweli Mokgata

The second quarter's rebound from the electricity crisis was not as high as expected, coming in at 4,9 percent. We asked chief executive officers in various sectors how Statistics South Africa's numbers translate into what they are experiencing.

l Lance Cooper of Yorkcor

Agriculture, forestry and fishing was the star performer, growing 19,6 percent quarter on quarter. Furthermore, this sector's first quarter growth was revised up to 17,2 percent from the 12,5 percent originally estimated by Stats SA.

Cooper said: ''We've predicted that prices in our sector are going to rise because there is a long-term shortage of timber in South Africa. For many years the planted area in South Africa stayed the same and now it has decreased because of restrictions on planting areas, but demand has continued to grow, although the economy is slowing. We are in a unique situation, similar to agriculture, because of the long-term shortage of timber.

''Prices will continue to rise to import parity level and within the next five years South Africa will be importing 30 percent of its timber.

''That would explain why this industry has continued to do relatively well.

''Only 1,1 percent of South Africa's total land area is devoted to timber production, and that is unlikely to increase. That is partly because trees for timber can only be planted on very steep slopes and in high rainfall areas, and South Africa is a water-scarce country, and also because most arable land is earmarked for agricultural use," Cooper said.

l Doug Murray, CEO of Foschini

Retail and wholesale performed worst, contracting 2,2 percent in the second quarter.

Stats SA has reported declining real retail sales for four months until June. If July and August also show lower sales, retail will contract during this quarter as well, placing the sector officially in a recession.

Murray said: "There is no recession, but trade is difficult, and we must cut our cloth accordingly.

"We have seen the peak of the interest rate cycle and we have sight of the end of the inflation cycle as well, so there is light at the end of the tunnel."

But he said there is a lag on the interest rate cycle, so the next few months would still be difficult. He added that interest rates could start coming down next year, giving some relief to the sector.

l Graham Briggs, CEO of Harmony Gold

Eskom's switching off the mining industry's power for five days in January has turned out to be even worse than originally thought, with Stats SA revising the first quarter's crash down to -25,1 percent from its previous -22,1 percent estimate.

Mining rebounded by 15,6 percent from the first quarter's low base.

Briggs said: ''The positive movement in the second quarter might be as a result of the rise in commodity prices.

''One can also note that it is a positive growth on a poor base considering the horrible experiences of the first quarter with reference to the electricity crisis. The other point to note is that in the second quarter we have been mining at a higher cost simply because all operational costs have gone up."

l Robbie Venter, CEO of Altron

Following a slump of 6,2 percent in real value added in the first quarter, growth in the electricity sector recovered marginally, albeit still in contraction, to 1,3 percent.

Venter said: ''The overall numbers were better than I expected. The adjusted growth rate of 4,9 is pretty good considering that previous estimates were much more pessimistic.

''The main drivers were in manufacturing and mining. In the first quarter these were hit by electricity shortages.

"There is an optimistic outlook, but the economy is taking some strain.

''I think we'll end up with 2,8 to 3 percent at the end of the year.

'Building and construction is robust, but residential side is a bit weaker."


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