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Companies spend heavily on property

PLEASED: Businessman Sandile Zungu PHOTO: ROBERT TSHABALALA
PLEASED: Businessman Sandile Zungu PHOTO: ROBERT TSHABALALA

ENTERPRISES have pushed up their investment on capital expenditure on property by a whopping 15.4% in the third quarter.

The spending, which was on plant and equipment, scaled to R85-billion between July and September from R74-billion in the second quarter.

Black Business Council general secretary Sandile Zungu said the increase did not mean that companies were passing a vote of confidence in South Africa.

He said the capital expenditure could be a result of companies buying material to be used in water and electricity infrastructure development programmes.

"Or the number might be high merely due to the amount of money that companies spent on replacing their fax machines, computers and air conditioners," Zungu said.

A Statistics SA report yesterday also showed that private companies in all industries generated a total income of R1.6-trillion in the third quarter.

This is an increase of 3.6% from R1.5-trillion when contrasted to the second quarter of this year.

A large part of the increase was as a result of the 13.5% electricity tariff increase the National Energy Regulator SA gave Eskom in July.

"Between the second and third quarters of 2012, turnover increased in seven of the eight industries covered in the survey," read the Stats SA report.

"The largest increase in turnover was recorded for electricity, gas and water supply (28.3%) followed by manufacturing (5.3%); real estate and other business services (excluding financial intermediation and insurance) (3.2%).

"This also included mining and quarrying (2.8%); trade (2.2%); community, social and personal services (excluding government institutions) (1.8%); and construction (1.5%). A decrease was recorded for transport, storage and communication (0.8%)," the report said.

The increase in business revenue comes as the inflation for November remained at the same position as last month at 5.6%.

This means "on average, prices increased by 0.2% between November and October. Food and non-alcoholic beverages saw an annual rate increase of 7% in November 2012 from 6,3% in October 2012".

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