Mining sector growth good news for Richards Bay
The mining and quarrying industry grew by 18.1% , the biggest contributor to the GDP, a trend Prof Kaseeram says is expected to continue for the next few years.
UNIVERSITY of Zululand economics professor Irrshad Kaseeram says the growth of the mining sector spells good news for Richards Bay.
Kaseeram was responding to Tuesday’s announcement that the country’s Gross Domestic Product (GDP) grew by 1.1% in the first quarter of 2021, translating into an annualised growth rate of 4.6%.
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The mining and quarrying industry grew by 18.1% , the biggest contributor to the GDP, a trend Prof Kaseeram says is expected to continue for the next few years.
‘This is good news for the Richards Bay area owing to the large presence of commodities and related firms, as well as the harbour that specialises in the export of bulk mining cargo,’ said Kaseeram.
This is coupled with commodity analysts’ prediction of a possible 10-year commodity super cycle during which there will be an increased demand for cheap commodities.
‘They support this prediction on the basis that mining products are priced in US dollars, which has depreciated, making it cheaper for the importing country and thus stimulating an increase in demand.
‘This means there will be business expansion, infrastructure development and employment creation in these enterprises,’ said Kaseeram.
‘However, the constraints of the water and electricity industries can place a damper on any expansion of industries,’ he added.
Statistician-General Risenga Maluleke said load-shedding and a decline in the supply of water contributed to the contraction in the electricity, gas and water supply industries.
Finance, real estate and business services increased by 7.4% in the first quarter, placing these sectors as the second-largest contributors to the growth.
‘These are all good indicators that consumer confidence is on the rise, and this will be followed by an improvement in business confidence that will contribute significantly to economic growth which is so desperately needed to solve our unemployment, inequality and poverty challenges,’ said Professor Kaseeram.
StatsSA said manufacturing output increased at an annualised rate of 1.6%, mostly driven by strong growth in the production of motor vehicles, parts and accessories and other transport equipment.
Retailers also enjoyed a positive quarter, led by increases in sales of grocery products, healthcare services, vitamins and drugs.
The agriculture, forestry and fishing industry performed poorly in comparison with the previous quarter owing to weaker production figures for field crops and animal products.
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