South Africa Socio-Economic overview Ndibu Motaung Head of Research South Africa
South Africa Snapshot Population: 50,59 million (2011 mid year estimate) Johannesburg major areas population City of Johannesburg 3,6 million East rand/ekurhuleni - 3,1 million Pretoria 1,4 million Land size area: 1,219,090 m² Capital City: Cape Town Administrative Capital: Pretoria Major economic hubs: Johannesburg, Cape Town and Durban Inflation (CPI): 5.0% (July 2011) Prime (bank) Lending rates: 9% (July 2011) Real GDP %: 4.8% (Q1 2011) Unemployment: 25.7 % (Q2 2011) Source: Stats SA, Reserve Bank, JLL data - 2011
Provincial population and production input Gauteng is an economic hub of South Africa contributing 35% to SA s GDP followed by Western Cape and KZN. Population by Province, 2010 est. GDP Contribution by Province, 2009 Mpumalanga 7% North West Northern Cape 6% 2% Free State 6% Limpopo 11% Gauteng 22% Northern Cape 2% Mpumalanga 6% Free State 5% Limpopo 7% North West 6% Gauteng 35% Eastern Cape 14% KZN 21% Western Cape 11% Eastern Cape 8% KZN 16% Western Cape 15% Source: StatsSA, 2010
Economic trends Factors 2010 2011 expectation GDP Growth Inflation (CPI) Rand /Dollar Interest rates Building plans completed (non-residential) Retail sales Imports Exports Oil prices Source: StatsSA, Absa, Jones Lang LaSalle Data
Economic growth South African economic growth has been fairly robust leading up top 2008 registering annual growth rates in excess of 4% between 2004 and 2007. The economy is well recovering from the global recession in 2008 with growth in the first quarter of 2011 recoding a 4.8% increase. However, subsequent quarters in 2011 will growth at a slower rate than Q1 rate due to projected global economic slowdown. The annual growth rate for 2011 is projected at an average of 3.9% which is higher that the 2010 annual growth figure of 2.9%. Inflation is expected to rise in 2011 at the back of supply side factor such as oil price pressures.
q/q % change Economic growth Real GDP Growth Rate 8.0% 6.0% 4.0% General government services 16% Personal services 6% Agriculture, forestry and fishing 2% Manu-facturing 17% Mining and quarrying 6% 2.0% 0.0% -2.0% Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 20f1 F Electricity, gas and water 2% Construction 4% -4.0% -6.0% -8.0% Finance, real estate and business services 24% Transport, storage and com-munication 10% Wholesale, retail, motor trade and accomodation 13% StatsSA, 2011
Monetary policy indicators Inflation and Interest Rate Source: SA Reserve Bank, 2011
Employment Total employment Employment by Sector, Q1 2011 14200 14000 13800 13600 13400 Communicity and social services 22% Private Households 8% Agriculture 5% Mining 2% Manufacturing 14% Utilities 1% 13200 13000 12800 12600 12400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 Finance and other business services 12% Transport 5% Trade 23% Construction 8% Unemployment R '000
Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Business confidence South African Chamber of Commerce & Industry Business Confidence Index Although economic recovery is expected to be fairly slow, business confidence is improving signalling positive outlook on the economy. During the recession period, business confidence was negative in line with majority of the economic indicators. 110 100 90 80 70 60 50 40 30 20 10 0 10% 5% 0% -5% -10% -15% -20% y/y % change BCI
Household per LSM LSM 4 to 6 represent the largest consumer segment in South African LSM 9 to 10 account for over 50% of gross household income and LSM 6 to 8 account for 31%. Households per LSM ('000), 2010 Household Income per LSM (R monthly) 2010 30000 27984 3,000 2,500 2,466 25000 2,191 2,000 1,931 20000 18286 1,500 1,000 500-480 965 1,111 1,302 1,009 1,150 764 LSM 1 LSM 2 LSM 3 LSM 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 10 15000 10000 5000 0 1362 1565 1881 2574 3502 6067 9676 10264 LSM 1 LSM 2 LSM 3 LSM 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 10 Source: SAARF, 2010
Contacts Ndibu Motaung Head of Research Johannesburg +27 (0)11 507 2200 ndibu.motaung@eu.jll.com This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
COPYRIGHT JONES LANG LASALLE IP, INC. 2009