Gloomy outlook for 2017

Business confidence on the North Coast is at an all-time low at the start of 2017, with the only beacons of hope coming from the tourism sector.

The 2016 year-end results of the biannual Ilembe Business Confidence Index showed the lowest level of business confidence since the start of the index in 2015.

The most confident group is tourism, catering and accommodation, yet even they only just crept over the neutral 50 index points mark by 0,2 points; 14,5 index points down from the mid-year 2016 result.

While tourism numbers increased by 19% and the overall feedback from businesses in this sector showed that sales either remained the same or were higher, concerns were highlighted about the future.

Some of those who took part in the survey described the 2016 Christmas season as “far better – but the future is under threat with the abuse of the beaches”.

The Christmas period – the golden trading period for the wider Ilembe district – was more of silver period as specialty retailers said there was “a lot more browsing rather than buying”.

Despite the popularity of holiday accommodation, property sales struggled with one developer describing the performance in this sector as “way below expectations”.

The gloomiest emotions came from the wholesale, retail and vehicle trade (31.3), transport, warehousing and storage (32) and manufacturing and assembly (39) sectors.

At least the weather helped the economy, as the agriculture, forestry and hunting sector showed a significant rise (49.3;>8.6) and positive feelings thanks to rainfall levels edging back to normal.

Ilembe Chamber of Industry and Tourism CEO, Cobus Oelofse said despite feeling hugely disappointed that they did not manage to recover from the dismal 2016 mid-year outlook, he does see a silver lining.

“I remain of the opinion that we have a unique opportunity, in our regional economy, to outperform any other area in SA in the economic growth stakes. However, we need to create that golden thread that links policy and delivery, allowing for real private-sector led economic growth.”

Oelofse said government support of small and medium-sized businesses was critical to growth. He stressed there must be focus on nurturing and attracting high potential economic sectors, especially the ones with high job creation potential.

These would be the big catalysts in 2017 if there was to be real growth.

“The chamber had engaged with all the local and district authorities, as partners in our regional economy, to ensure the creation of institutional platforms from which these priorities can be progressed.

“Nationally our economy has been in the doldrums for a long time now, not only due to significant domestic issues but also due to subdued global demand.

“The country’s economic growth in 2016 is expected to have been the slowest in seven years. Although we have managed to avoid a credit downgrade towards the end of last year, investors remain scared.”

He said the state of the regional labour market remains the North Coast economy’s biggest risk.

This was not helped by the poor performance of government schools generally.

“The recovering world economy with improving commodity prices will hopefully aid SA’s economy as well.”

>>> Meet the top players in the North Coast property industry. See our Property People feature.

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