Gauteng\u2019s leadership role as the economic powerhouse of South Africa\u2019s economy will continue, with the province contributing nearly 35% to national GDP until at least 2017.<\/p>\n
This will be the case – even though economic challenges could see today\u2019s dominant sectors being surpassed by others when it comes to contributing to future growth, said Standard Bank.<\/p>\n
The bank conducted research into the present state of the provincial economy, the business banking environment and the outlook until 2017.<\/p>\n
The research revealed that Gauteng\u2019s leadership position in South Africa is driven by its dominance of 19 of 34 detailed economic sectors, and currently accounts for approximately:<\/p>\n
When breaking the sectors down at a provincial level, dominant industries in Gauteng comprise mainly of tertiary sector industries, including trade (16%), transport (9.3%), finance (26.6%) and community services (23.1%), which make up 75% of the provincial economy.<\/p>\n
The province is also regarded as the natural destination for international investors wishing to establish a springboard into the African continent, Standard Bank said.<\/p>\n
\u201cSince 1997, Gauteng\u2019s average annual growth rate has, with a few minor exceptions, exceeded that of South Africa as a whole,\u201d said Amrei Botha, head of business segment at the bank.<\/p>\n
The top three sectors showing growth between 2007 and 2012 were construction at 4.7%; finance, insurance, real estate and business services at 4.1%; and community, social and personal services at 3.7%.<\/p>\n
“We can expect to see this picture alter for the period 2012 to 2017, with the finance sector growing by 5.0% taking top spot.\u00a0 This is followed by transport, storage and communication with an anticipated growth rate of 4.9%.\u00a0 Taking third position will be construction improving to 4.8%,” the business lead said.<\/p>\n
Manufacturing capacity<\/strong><\/p>\n Botha said that Gauteng\u2019s diversified manufacturing sector, which produces more than 50% of South Africa\u2019s manufactured exports, and is also a key driver of employment, faces several major challenges in next three years.<\/p>\n \u201cThese range from energy security, skills shortages, underinvestment in capital equipment and technology, through to ageing foundry and tooling industries, uncompetitive pricing of raw materials and failure to attract foreign direct investment.<\/p>\n \u201cThe impact of these factors could be exacerbated by the economic downturn, decreases in consumers\u2019 disposable income and therefore lower sales, strikes and industrial action, and increased shipping costs,” Botha said.<\/p>\n Energy demand<\/strong><\/p>\n Turning to energy costs, Gauteng will be responsible for a considerable portion of the expected doubling in the country\u2019s energy demand by 2030.<\/p>\n \u201cThese growing energy demands are occurring within a supply-constrained environment. The province will have to be a key player in the process to reduce the country\u2019s heavy dependence on the use of coal and find ways to diversify the country\u2019s power-generating capacity,\u201d said Botha.<\/p>\n Finance, insurance, real estate and business services<\/strong><\/p>\n It is expected that 26.6% \u2013 more than a quarter \u2013 of Gauteng’s economic activity will stem from this sector, with growth of about 5.0%.<\/p>\n \u201cThe province\u2019s strength in this area is further secured in the forecast period in that it is the only province anticipated to reflect an increase in the size of its contribution (41.7%) to the national economy,\u201d said Botha.<\/p>\n Transport, storage and communication<\/strong><\/p>\n The transport sector supports growth across all other sectors of the provincial economy.<\/p>\n The province\u2019s proposed 25-year integrated transport master plan (ITMP25), set to guide the Gauteng government in its transport development and planning, will have massive benefits for the sector if executed.<\/p>\n Key proposals of the programme include building specialised freight bypass roads through the province, and upgrading and expanding the existing commuter rail network.<\/p>\n Transnet has implemented a R300 billion capital expenditure programme for the period 2013 to 2019, with many planned improvements identified for Gauteng.<\/p>\n Further to this, Gauteng boasts the best telecommunications and technology on the continent.<\/p>\n \u201cThe South African Information and Communication Technology (ICT) industry is set to boom during the next four years, as it is anticipated that internet traffic will increase four-fold,\u201d Botha said.<\/p>\n One in three unemployed in Gauteng: DA<\/strong><\/a><\/p>\nMore on Gauteng<\/h3>\n