On Tuesday, 14 April the Durban Chamber's Southern Area Business Meeting held a forum discussion, where they hosted Vuyo Jayiya. Vuyo discussed, "Doing business in the south region". The presentation covered: • South economic contribution to eThekwini and country • Economic profile of existing industry • Constraints and Opportunities to doing business in South

1. ETHEKWINI STATE OF THE ECONOMY
PRESENTATION TO THE S.D.B. LED STAKEHOLDERS
18 AUGUST 2014
ECONOMIC DEVELOPMENT AND INVESTMENT
PROMOTION UNIT:

2. Structure of this Progress Presentation
 Overview
 Department Overview
 Long-term Dev Framework
 Package of Plans
 Demographics
 The Durban Economy
 Labour Indicators
 Foreign Trade and Investment
 Spatial Economy
 Summary
Majority of data from HSI Global
Insight (2013)

3. Department Overview
Economic
Development and
Investment
Promotion (H.O.D)
LED & Spatial
Development
Policy and
Research
Sector
Development
Investment
Promotion

4. Long Term Development
Framework

5. Package of Plans

6. Demographics

7. Demographics Cont…

8. Durban Economy in context

9. Sector
0%
Agriculture
1%
Mining
0%
Manufacturin
g
22%
Electricity
2%
Construction
3%
Trade
17%Transport
16%
Finance
22%
Community
services
17%
Sectorial composition of GDP (Main Sectors) in 2013
Main sectors – manufacturing,
finance, trade, community
services
Total GDP in 2013 = R217.7
billion
Growth over 17 years = 3.7% and
2.6% between 2012 and 2013
Rate not adequate to meet NDP
‘s GDP growth targets – requires
growth > 5%.
The Durban economy

10. Industrial GDP Contribution

11. GDP growth compared with other regions 1997-2013
In 2013, City experienced a positive growth rate of 2.6%, while KwaZulu-Natal and South Africa grew by 3.1%
and 1.9%, respectively.
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Average Annual Growth of Top 5 Economies in SA
SA Cape Town Ethekwini Joburg Port Elizabeth Pretoria

12. Economic Production Indicators
cont.
Reasons for decline in
secondary sector include:
• Increased imports at
cheaper prices especially
from Asia.
• Increased cost of land
and labour
• Inability of local
government to finalise
large projects such as the
automotive supplier park,
, or capitalise on existing
such as DTP
Tertiary Sector:
• Highest contributors are retail trade, land and water transport, and real estate activities,
• Highest growth sectors are real estate activities and wholesale & commission trade
• Citizens are spending more on real estate. This could be due to the low interest rates
prevailing at the time
Tertiary Sectors -Trade, transport,
finance & community services 2010 2011 2012
% change
2011-2012
%
contribution
Wholesale & commission trade 12,550 14,673 17,162 17% 5.9%
Retail trade & repairs of goods 22,464 26,149 29,171 12% 10%
Sale & repairs of motor vehicles,
sale of fuel
7,316 8,794 10,059
14%
3.5%
Hotels & restaurants 2,960 3,050 3,476 14% 1.2%
Land & Water transport 23,624 26,041 27,980 7% 9.6%
Air transport & transport
supporting activities 5,031 5,770 5,988
4%
1.8%
Post & telecommunication 8,407 9,182 9,657 5% 2.1%
Finance & Insurance 23,870 25,825 26,013 1% 3.3%
Real estate activities 13,695 14,673 18,954 29% 8.9%
Other business activities 14,212 14,812 14,897 1% 6.5%
Public administration & defence
activities
9,755 10,282 11,391
11%
5.1%
Education 14,457 15,955 17,312 9% 3.9%
Health & social work 11,914 12,925 13,969 8% 4.8%
Other service activities 11,766 12,761 13,620 7% 4.7%
Primary
sector
1%
Seconda
ry
sector
23%
Tertiary
sector
76%

13. Economic Production Indicators
cont.
• The industries with highest labour remuneration figures in eThekwini were community services (32.8%),
manufacturing (22,8%), and wholesale and retail trade(15.1%). This trend has changed slightly with finance
and business sector slipping to 4th place in 2012
• Highest growth sectors were community services; transport, storage and communications; wholesale and
retail trade, and construction; while the lowest growth sector was the finance and business sector. No
sectors experienced negative growth between 2011 and 2012.
• The public sector wage bill is excessive for eThekwini
Labour Remuneration (current prices) 2010 2011 2012 % change
2011-2012
%
contributio
n
Agriculture, fishing & forestry 1,084 1,101 1,181 7% 0.8%
Mining & quarrying 139 149 156 5% 0.1%
Manufacturing 28,440 30,785 33,667 9% 22.8%
Electricity, water & gas 2,440 2,715 3,023 11% 2.0%
Building construction & civil
engineering
4,228 4,309 4,658
8%
3.2%
Wholesale & retail trade 17,785 20,571 22,318 8% 15.1%
Transport, storage &
communications
11,392 12,838 13,847
8%
9.4%
Financial & business 20,324 21,544 21,819 1% 14.8%
Community services 39,905 43,325 46,866 8% 32.8%
Total industries 125,738 137,339 147,535 7% 100.0%

14. Labour Indicators

15. Total Formal/Informal Employment: Broad Sectors
2012 2013 % Change
1,230,425 1,243,820 1.1%
Agriculture
1%
Mining
0%
Manufacturin
g
21%
Electricity
1%
Construction
4%
Trade
15%
Transport
7%
Finance
17%
Community
Services
24%
Households
10%Big employment sectors –
community services,
manufacturing and finance
Total formal/informal employment
in 2013 = 1,243,820
Growth over 12 years = 2.8%
Growth not adequate to meet
NDP targets – requires growth >
4%.
Labour Indicators

16. Labour Indicators (continued)
• The highest
percentage of people
unemployed fall within
the African population
group; whereas the
white population are
among the least
unemployed.
• Most of employment
is in trade sector, then
community services
and manufacturing.
• High growth sectors
are agriculture(10.6%)
and community
services (5.9%) with
manufacturing and
construction
experiencing negative
growth
2010 2011 2012
Growth
2011-2012
Unemployed 290,823 270,523 280,058 3.5%
African 246,937 229,640 236,674 3.1%
White 5,171 4,722 4,736 0.3%
Coloured 7,164 6,692 6,906 3.2%
Asian 31551 29,470 31,741 7.7%
Employed 1,064,900 1,094,014 1,115,737 2%
Agriculture 11,048 10,678 11,810 10.6%
Mining 377 357 369 3.3%
Manufacturing 198,371 197,812 193,947 -2%
Electricity 4,755 4,655 4,990 7.2%
Construction 72,640 71,923 71,632 -0.4%
Trade 255,548 267,157 270,058 1.1%
Transport 73,782 75,311 78,850 4.7%
Finance 145,987 151,113 153,942 1.9%
Community services 214,752 228,991 242,549 5.9%
Households 87,641 86,015 87,590 1.8%
Informally employed 259,433 269,139 270,325 0.4%

18. Foreign Trade and
Investment

19. Foreign Trade Overview
.
Merchandise exports from and imports to eThekwini (R thousands, current prices)
• In eThekwini, imports have grown at a faster rate than exports (growth of 9% and 10%
respectively), therefore, the trade balance has remained negative, and spiked in 2011 and
2012 due to a large increase in imports driven by renewed local consumer spending.
• Over 60% of all exports are ‘motor vehicles, parts & accessories’ and ‘basic iron & steel’.
Almost 50% of imports are ‘motor vehicles, parts & accessories’, and ‘basic chemicals’.
• The majority of exports are destined for African countries and the majority of imports are from
Asia. The number one export partner is Japan, while the top import partners are Germany and
China.
-35,000,000
-30,000,000
-25,000,000
-20,000,000
-15,000,000
-10,000,000
-5,000,000
0
-100,000,000
-80,000,000
-60,000,000
-40,000,000
-20,000,000
0
20,000,000
40,000,000
60,000,000
2006 2007 2008 2009 2010 2011 2012 Merchandise Exports
Merchandise Imports
Trade Balance

20. Domestic Fixed Investment Trends (Constant, 2005,
Rm)
Total domestic
fixed investment
in 2011: R48, 1
billion, with a
growth rate of
3.8 % year-on-
year
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Agriculture, forestry and
fishing
Mining and quarrying
Manufacturing
Electricity, gas and water
Construction
Wholesale and retail trade,
catering and accommodation
Transport, storage and
communication
Finance, insurance, real
estate and business services
Community, social and
personal services
General government
Investment
Indicators

21. Investment
IndicatorsDurban Investment Dashboard

22. Investment
IndicatorsDurban Investment Dashboard

23. Latest Statistics on
Dashboard:

57 Projects

3, 736, 674 work
opportunities during
construction

617 360 permanent jobs

R8,4bn in rates income

20 year timeframe
Investment
IndicatorsDurban Investment Dashboard

24. Spatial Economy

25. Share of GDP and Manufacturing per
region
West North Central South
GDP 12,892,571,340 37,114,978,100 103,335,912,710 41,998,527,850
0
20,000,000,000
40,000,000,000
60,000,000,000
80,000,000,000
100,000,000,000
120,000,000,000
GDP per Planning Region: 2013 (Rands)

26. Comparing Manufacturing sectors amongst top 5
economies
Cape Town Ethekwini Johannesburg Nelson Mandela Bay Tshwane
Primary sector 1,586,396 2,526,130 4,638,321 206,591 1,879,628
Secondary sector 42,931,635 53,100,928 67,728,193 16,256,930 36,664,302
Tertiary sector 158,944,537 139,714,932 230,146,098 41,219,463 140,716,397
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
Share of Primary, Secondary and Tertiary contribution 2013 (R1000, Constant 2005
Prices)
• EThekwini 2nd most significant manufacturing region
• 2nd largest compound annual growth rate in last 10 years (3.23%).
• Tshwane largest growth rate = 3.79% and Johannesburg = 2.63%

27. Central
59%
North
26%
South
11%
West
4%
Total Business rates

28. Services and Utilities!!

29. Summary

30. Challenges and Opportunities
CHALLENGES
 ????
OPPORTUNITIES
 SEZ at DTP and significant
development momentum
 Look at SEZ at
Hammarsdale and Cato
Ridge
 SIP 2 projects
 Implementation of the
Economic Development
and Job creation Strategy
– address a lot of the
challenges
 DTIs incentives in to grow
our manufacturing base.
 Inner City
 Township development
 ICDG
 Unlock key projects on the
investment dashboard

31. Thank youProject Manager: LED and Spatial Development Department
Economic Development & Investment Promotion Unit
EThekwini Municipality
vuyo.jayiya@durban.gov.za