Economic Trends & The Productive City

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  • 1. 4. Economic trends & the productive city WELL-GOVERNED CITY Key issue: Is the political & institutional context stable, open and dynamic enough to accommodate all interests CITY POPULATION Key issue : What will be the future size, form and character of urban populations, given the commitment that residents have to lives in the city? INCLUSIVE CITY Key issue: Do residents have the opportunities and capacities to share equitably in the social benefits of city life? SUSTAINABLE CITY Key issue: How is the city impacting on the envelope of natural resources that sustains the settlement and makes it livable? PRODUCTIVE CITY Key issue: Can the local economy provide a majority of residents with means to earn a reasonable living?
  • 2. 4. Economic trends & the productive city
    • Population growth and economic growth are closely linked
    • If cities cannot provide populations with opportunities to use their productive capacity, and be adequately remunerated for this, they may disinvest
    • Key issues examined in report :
    • Economic value growth in cities and key sectors
    • Employment & unemployment
    • Distribution of income
    • Key micro-economic factors impacting econ development
    • Prospects for city economic development strategies
  • 3. 4. Economic trends & the productive city
    • GVA growth averaged 2,2% across 9 cities between 96-01. And in some cities very strong growth
    • But GVA per capita growth did not keep pace
    • Fastest growing for 96-01 was Tshwane. Continued in 01-02
    • Some cities seeing recent slowdowns?
    • Others (eg Msunduzi) a turnaround?
    3.1 -0.2 0.5 1.1 -1.1 0.6 2.2 3.9 5.0 5.1 2.9 0.7 1.6 2.2 4.4 2.3 2.3 4.5 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 01-02 96-01 Msunduzi Mangung Buffalo City Nelson Mandela Tshwane Ekurhu-leni Cape Town eThekwni Joburg
  • 4. 4. Economic trends & the productive city
    • 2001-02 annual growth rates per sector shows differences across a sample of cities, although some, such as transport, storage and comms, uniformally strong
    1.11% 1.11% 1.11% 1.11% 9 Community, social and personal 4.24% 2.64% 2.03% 5.69% 8 Finance, insurance, real estate & bus 6.56% 5.52% 4.58% 10.22% 7 Transport, storage and comms 3.76% 3.20% -0.03% 4.65% 6 Wholesale and retail trade 1.85% 0.24% -1.00% 3.59% 5 Construction 1.00% -0.82% 3.37% 2.43% 4 Electricity, gas and water supply 3.09% 1.32% 1.59% 5.29% 3 Manufacturing -16.18% -16.20% -8.49% -5.83% 2 Mining and quarrying 3.22% 3.94% 4.00% 3.78% 1 Agriculture, hunting, forestry, fish 3.07% 2.19% 1.65% 5.02% TOTAL CITY MSUNDUZI NELSON MANDELA CAPE TOWN TSHWANE
  • 5. 4. Economic trends & the productive city
    • 2001-02 annual sub-sector growth rates within manufacturing also show key differences
    -5.69% -4.31% 1.87% 0.29% 38 Transport equipment -2.09% -0.57% 6.53% 3.74% 39 Furniture and other items NEC & recycling -1.15% 0.15% 7.17% 4.89% 37 Electronic, sound/vision, medical & other -3.89% -2.78% 4.02% 1.27% 36 Electrical machinery and apparatus 1.34% 1.30% 7.97% 5.86% 35 Metal products, machinery, appliances -2.60% -2.19% 4.34% 2.98% 34 Other non-metallic mineral products -0.73% 0.75% 7.45% 4.72% 33 Fuel, petroleum, chemical and rubber -2.69% -1.22% 5.15% 4.02% 32 Wood paper and printing 1.32% 1.92% 7.52% 6.20% 31 Textiles, clothing and leather goods -9.83% -8.61% -2.48% -4.85% 30 Food, beverages and tobacco products -3.46% -2.76% 4.43% 3.31% MANUFACTURING BUFFALO CITY MANGAUNG ETHEKWNI EKURHULENI
  • 6. 4. Economic trends & the productive city
    • Census data shows SA as a whole created a net 469 927 new jobs in 96-01. More than half of these – 247 672 – were formed in the nine SACN cities. But …
    • Unemployed also grew 1 117 475. LFS shows expanded unemployment 35,72%
  • 7. 4. Economic trends & the productive city
    • The strength of the local economies of the nine SACN cities needs to be seen in a long term perspective of economic restructuring
    • Long term decline in manufacturing employment, especially in key centres
    • Long term growth in employment in the finance / business sector
  • 8. 4. Economic trends & the productive city
    • However some surprising recent turnarounds
    • Cities with a long term fall in manufacturing employment saw growth in this sector in 1996-2001
    • Note especially the recent growth of manufacturing jobs in Johannesburg and Ekurhuleni
  • 9. 4. Economic trends & the productive city
    • Jobs growth/decline in occupations follows trends in key sectors. Worrying falls in professionals and pvt household employees
  • 10. 4. Economic trends & the productive city
    • GVA growth does not lead to the same increase in emplyment in all sectors
    1.11 0.28 9 Community, social and personal 2.95 7.35 8 Finance, insurance, real estate & bus 4.32 8.08 7 Transport, storage and comms 1.41 2.28 6 Wholesale and retail trade 0.73 2.77 5 Construction 0.25 4.20 4 Electricity, gas and water supply 2.27 3.60 3 Manufacturing -5.06 3.87 2 Mining and quarrying 3.78 0.76 1 Agriculture, hunting, forestry, fish 2.32 4.52 Total city Employ growth GVA growth 1996-2001
  • 11. 4. Economic trends & the productive city
    • Incomes earned from employment still reflect the very serious racial imbalances of apartheid
    • Larger numbers of black income earners earning near the lower income brackets
    • Total earning power clearly skewed towards white earners
  • 12. 4. Economic trends & the productive city
    • In some cities unemployment is so high, and average monthly income so low, relative to other parts of country, that it does not make economic sense to remain there
    R 1234.47 R 5297.22 Total - R 368.70 R 3694.04 Buff City R 164.13 R 4226.88 Ethekwini R 2421.07 R 6483.81 Tshwane Difference in AMI for each city and National AMI: 2001 Average Monthly Income per employed person AMI: 2001  
  • 13. 4. Economic trends & the productive city
    • Various reasons for economic strength/weakness and strategies to address
    • The key reason for economic weakness is insufficient demand & inadequate use of productive capacity. But also micro-economic constraints
  • 14. 4. Economic trends & the productive city
    • Some cities see global demand as answer & have set out to promote exports by addressing constraints on micro-economic competitiveness. As part of this are trying to address institutional inefficiencies, skills gap, etc
    • Very NB that traditional LED not only focus. But will global economy provide stable & sustainable demand?
    35 38 27 Av processing time (in days) for industrial / comm 15 20 10 Av processing time (in days) for dwellings 5 4 5 Av processing time (in days) minor building works 13 026 13 983 12 021 Total number of applications in 2002/03 Ekurhul eThekw Joburg
  • 15. 4. Economic trends & the productive city WELL-GOVERNED CITY Key issue: Is the political & institutional context stable, open and dynamic enough to accommodate all interests CITY POPULATION Key issue : What will be the future size, form and character of urban populations, given the commitment that residents have to lives in the city? INCLUSIVE CITY Key issue: Do residents have the opportunities and capacities to share equitably in the social benefits of city life? SUSTAINABLE CITY Key issue: How is the city impacting on the envelope of natural resources that sustains the settlement and makes it livable? PRODUCTIVE CITY Key issue: Can the local economy provide a majority of residents with means to earn a reasonable living?