INVESTMENT OPPORTUNITIES, BUSINESS INTELLIGENCE & RELATED RESEARCH
The NMBM has targeted and prioritised specific economic sectors for robust development and investment, namely;
The Trade & Investment sub-directorate aims to provide investors with all the intelligence and advice they might need in order to make informed business/investment decisions within the economy of Nelson Mandela Bay.
If you are business investor needing specific information or advice, then our team is here to help source and interpret the information you need:
CONTACT
Mr Jeremy Dobbin
Tel: +27 41 503 7561
Ms Anelisa Nkwandla
Tel: +27 41 503 7527
NELSON MANDELA BAY ECONOMIC BULLETIN
JULY/AUG 2022
Read the full report here
OVERVIEW
While the ongoing economic costs and risks of COVID-19
continue to decrease, conflict in Ukraine has triggered a devastating
humanitarian crisis which is contributing to a significant slowdown in global
economic growth in 2022. War in Europe has disrupted the production and
international trading arrangements of a wide range of energy, food, and other
products and will likely continue to do so for an extended period of time.
Global fuel and food prices have also increased rapidly, hitting vulnerable
populations in low-income countries especially hard.
As per the latest World Economic Outlook published in April,
the International Monetary Fund expects global growth to slow from an estimated
6.1% year-on-year in 2021 to 3.6% in 2022 as well as in 2023.
Moreover, the South African Reserve Bank has subsequently
revised its domestic forecast in May; expecting the South African economy to
grow by 1.7% in 2022 (revised downwards from the 2.0% expected at the time of
the Monetary Policy Committee’s meeting in March). This is also due to a
combination of endogenous short-term factors; including the destructive impact
of April’s flooding in Kwa-Zulu Natal and the continued electricity supply
constraints which the country faces, now exacerbated by wildcat striking.
At a metropolitan level, it is expected at the time of
writing that the economy of Nelson Mandela Bay will grow by 1.3% this year,
following a decline of -7.8% year-on year in 2020 and a 6% y-on-y gain in 2021.
In terms of the post-pandemic recovery, NMB’s real GDP in 2021 improved to 97%
of the metropole’s real GDP in 2018. Tourism, hospitality, and construction sectors
should see stronger recoveries as the year progresses. Considering city-regional
factors at play, the insecurity of water required for industrial, commercial,
and household activity remains the most significant risk to inward investment
and economic recovery in the third quarter.
In the public health sector, the ongoing loss of life in Nelson
Mandela Bay associated with COVID-19 has improved considerably since the end of
the fourth wave in/around January 2022 – with the weekly number of deaths from
natural causes returning to accustomed predicted boundaries.
In the labour market, jobs figures released for the first
quarter of 2022 indicate that the number of employed persons in Nelson Mandela
Bay has increased by almost 22,000 over the previous four quarters. This saw
the unemployment rate improve to 36.4% in the first quarter of 2022.
In terms of specific industrial and commercial conditions in
the city-region, the number of newly manufactured vehicles shipped from the
Port of Port Elizabeth in Gqeberha improved significantly, on average, over the
last four reported months compared to the average for the preceding 24 months.
However, the Automotive Business Council, has reported that total domestic
production is down by 5.75% year-to-date (up to and incl. May 2022), while
exports are down by 2.93% year-to-date (incl. June 2022). Rising consumer
inflation globally, increased interest rates, and reduced disposable income
will result in lower demand – adding to the automotive industry’s existing
headwinds.
At Nelson Mandela Bay’s two commercial seaports, container
traffic has normalised – following last year’s explosive protests in
Kwazulu-Natal which disrupted national traffic – and is now averaging at 16.7%
of national volume over the past ten months (i.e post-July 2021). In addition, passenger
traffic at Nelson Mandela Bay’s Chief Dawid Stuurman International Airport
(PLZ) has recovered to 52% of its pre-COVID throughput for the year ending
March 2022; 4 percentage points above the national average.
Furthermore, the value of goods exported from Nelson Mandela Bay amounted to R59.4 billion in 2021 – equating to a 10.6% year-on-year increase. Consider this within the context of producer price inflation (on final manufactured goods) averaging 7.1% in 2021 and averaging at 9.3% for goods from the primary sector.
Finally, the value of building plans passed in Nelson Mandela Bay in the first five months of 2022 has increased by 3% when compared to the corresponding five months of 2021.
