2019 QUARTER 3 (July - September) - Economic Performance Indicators for Cape Town - Invest Cape Town
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Economic Performance Indicators for Cape Town 2019 QUARTER 3 (July – September) WWW.INVESTCAPETOWN.COM
EPIC 2019: Q3
ACKNOWLEDGEMENTS
The EPIC quarterly publication is a collaboration between the Enterprise and
Investment, and Policy and Strategy Departments of the City of Cape Town.
ECONOMIC CONTENT AUTHORED BY THE ECONOMIC
ANALYSIS BRANCH, POLICY AND STRATEGY DEPARTMENT
Head – Economic Research:
Paul Court
Project manager and author:
Dilshaad Gallie
Other:
Monique Petersen
Layarn Booley
Yoliswa Tiwe
DISTRIBUTION BY INVEST CAPE TOWN
Enterprise and Investment Department:
Leán Muller
Email:
economic.research@capetown.gov.za
info@investcapetown.gov.za
Online access:
http://www.capetown.gov.za/work%20and%20business/doing-business-in-
the-city/business-support-and-guidance/economic-reports/Economic%20
resources%20and%20publications
ADDITIONAL SOURCES OF INFORMATION
City of Cape Town, Planning and Building Development Management:
Lizanne Ryneveldt
Marius Crous
Cape Town Tourism:
Nolubabalo Manona
Roxanne Lombard
Wesgro:
Gadijah Darries
2
FOREWORD
ACHIEVING AND CONSOLIDATING GROWTH have delivered some noteworthy and remarkable
outcomes that in my view, will diversify the
In my first opportunity to provide the foreword landscape and bring new entrants into the value
in my role as Mayoral Committee Member for chain – genuine and authentic products and
Economic Opportunities and Asset Management experiences proudly provided by what I refer to as
(EPIC Q2 2019), I focused on the rationale and ‘tourism-preneurs’.
expectations placed on the newly established
Economic Opportunities and Asset Management The uptake in employment is also notable. This
directorate. gives us results, reinforcing our decision to increase
the support to a number of key partners which
Our goal remains a simple and vital one, especially undertake skills training, investor promotion and
when viewed in the context of the second and facilitation, as well as sector development activities.
third quarter economic indicators. My portfolio is Through the tireless efforts of my team, we truly
focused on achieving economic growth, creating live the ethos of the City; ensuring we invest in
job opportunities and keeping Cape Town open training for placement, keeping our focus on the
for business. skills demand and through key sector organisations,
getting our valuable labour force placement ready.
Quarter 3 has confirmed that our focus on tourism
retention, extension and diversification, through The resilience of the Cape Town economy – from
the Tourism Development Strategy was well timed tourism to commercial space demand – is cause to
ahead of the traditional high season. The number acknowledge and appreciate the richness of our
of arrivals at our award-winning Cape Town beautiful city. Our vacancy rate remains the largest
International Airport increased by 2,1%. This is across the five biggest metros in South Africa.
good news, especially as a biweekly route
expansion to Nairobi starts in October, and a new Our job is to preserve and convert this economic
route to Newark, New York, starts in December. and cultural abundance to real opportunities, while
removing the limitations for growth. I believe that
Occupancy rates at Cape Town establishments we have the ingredients and formula to build and
were on average 1,8 percentage points higher fuel our growth trajectory. After all, Cape Town
than in the previous year while the city’s top makes business sense.
attractions (with the exception of Table Mountain
Aerial Cableway undergoing routine maintenance) James Vos
all posted increased visitor numbers. Mayoral Committee
Member for Economic
Capitalising on Cape Town as a destination of Opportunities and
choice, we have the opportunity to build and Asset Management
diversify our visitor experiences beyond the top
attractions. Engagements with the tourism sector
3
EPIC 2019: Q3
CONTENTS
ACKNOWLEDGEMENTS 02
FOREWORD 03
INTRODUCTION 06
01. SUCCESS STORIES 08
02. OVERVIEW 14
03. ECONOMIC GROWTH 20
Quarter-on-quarter GDP-R growth rate 22
Sectoral drivers of economic growth in the Western Cape 23
04. INFLATION 24
Inflation overview 26
Geographical inflation 27
05. LABOUR MARKET 28
Cape Town’s labour market performance 30
Employment comparison of metros 31
Unemployment in Cape Town 32
Sector employment trends for Cape Town 33
06. INFRASTRUCTURE 34
Container handling 36
Airport statistics 37
07. TOURISM 38
08. ADDITIONAL INDICATORS 42
Building developments 44
Commercial property developments 45
New vehicle sales 46
REFERENCE LIST 48
ABBREVIATIONS 50
4
LIST OF TABLES
Table 1: Official (strict) versus expanded (broad) unemployment rates 32
Table 2: Income derived from tourist accommodation, Quarter 3, 2018 versus Quarter 3, 2019 40
LIST OF FIGURES
Figure 1: Real GGP growth for the Western Cape, Quarter 1, 2008 to Quarter 3, 2019 22
Figure 2: Sectoral real GDP-R growth rates in the Western Cape, Quarter 3, 2019 23
Figure 3: CPI and PPI trends for South Africa, January 2013 to September 2019 26
Figure 4: CPI inflation rate at a provincial level, July to September 2019 27
Figure 5: Employment comparison with other metros, Quarter 2, 2019 versus Quarter 3, 2019 31
Figure 6: Quarterly and annual change in employment per sector for Cape Town, Quarter 3, 2019 33
Figure 7: Total containers handled, Quarter 1, 2015 to Quarter 3, 2019 36
Figure 8: Total (monthly) passenger movements at South Africa’s major airports, Quarter 1, 2014
to Quarter 3, 2019 37
Figure 9: Total (monthly) visits to the top 5 tourist destinations of Cape Town, Quarter 1, 2014
to Quarter 3, 2019 41
Figure 10: Building plans submitted to the City of Cape Town, Quarter 1, 2012 to Quarter 3, 2019 44
Figure 11: Office/banking space sector developments, Quarter 1, 2017 to Quarter 3, 2019 45
5
EPIC 2019: Q3
INTRODUCTION
This is the 26th edition of the EPIC publication, which capitalising on this demographic dividend is a key way
presents and analyses economic (and related) trends of enhancing productivity and securing sustainable
in Cape Town on a quarterly basis. This edition economic growth for the city.
focuses on the third quarter of 2019, covering the
However, encouraging and stimulating higher levels
period 1 July to 30 September 2019.
of youth participation in the economy, requires the
Western Cape growth figures, a strong proxy for removal of barriers to employment, whether these are
Cape Town, saw a slight contraction of 0,3% in the physical constraints that hinder young people from
third quarter. This contraction was in line with, but finding employment, or a lack of skills required to
marginally less than, the national economic growth fill the opportunities that do arise. The City of Cape
decline of 0,6%, which reflects the current challenging Town is acutely aware of the need to break down
economic climate in South Africa. these barriers, and the administration’s new Inclusive
Economic Growth Strategy (IEGS) identifies various
The tertiary sector, the lifeblood of the Cape Town workforce development initiatives aimed at reducing
economy, served to cushion the impact of poorer job search frictions in particular. While the provision of
growth in some of the other sectors, with trade and formal education is not within the City’s mandate, it is
business services, including finance, growing by 2,7% also very aware of the role that it has to play, through
and 1,6% respectively, quarter-on-quarter. The overall its sector organisations, to facilitate access to relevant
structure of Cape Town’s economy has also enabled vocational training and digital literacy.
it to be more resilient to the economic pressures
experienced by much of the rest of the country, and The comparatively stronger performance of the
even the Western Cape Province. More than 60% of tertiary industries in the third quarter, both from a
the city’s economy comprises sectors that experienced GVA and employment perspective, reflects a longer-
some growth, at national and provincial levels, over term shift towards an increasingly tertiary-sector
the quarter. Cape Town’s economy is also only oriented and high skill-intensive economy. This trend
marginally reliant on agriculture, which experienced is well established and, in the South African context,
a sharp decline at a provincial level. has been compounded by recent job losses in other,
more labour intensive, sectors like construction.
Another positive was the continued growth in For the most part, the youth will be the most likely
employment opportunities for people in Cape candidates to fill positions in this shifting employment
Town, with 19 232 more residents acquiring work landscape with its expanding tertiary sector. This
than in the second quarter. Unfortunately, despite means that they need to be accessing skills and
this increase in employment in the city, the rate of training that will adequately prepare them to do so.
employment growth is not consistently keeping However, Cape Town’s labour market continues to
pace with the city’s fast-growing labour force. This grow disproportionately at the lower end of the skills
translates to an increase in Cape Town’s strict and spectrum, which is further widening the gap between
broad unemployment rates. Of concern is the lack of the supply and demand for labour in the city. This
employment opportunities for youths aged between can be addressed, but will take a collaborative effort
15 and 24 years, particularly the 26,2% of this segment from a broad coalition of stakeholders committed to
of the population classified as being ‘not in education, ensuring that the city’s labour force (and especially
employment and training’ (NEET) in the third quarter. the youth) can access the skills needed to make
them employable in this new world of work with its
Apart from the obvious negative impacts of this increasing emphasis on digital skills.
youth unemployment on social cohesion in the city,
a high NEET rate implies that Cape Town is missing Tourism has long offered some of the best prospects
an opportunity to take advantage of its demographic for employment creation. So, it’s pleasing that the
dividend. Presently, Cape Town finds itself in figures shown by the industry in the third quarter
the relatively short window of opportunity on its provide reason to be cautiously optimistic about
development path where its working age population the sector’s prospects. Occupancy rates at Cape
exceeds its non-working age population. Effectively Town establishments were higher on average
6
HIGHLIGHTS OF THE ECONOMIC
PERFORMANCE INDICATORS
FOR CAPE TOWN (EPIC) FOR
THE THIRD QUARTER 2019
Following positive growth in the second
(1,8 percentage points) than those of the quarter of 2019, the Western Cape economy
contracted by 0,3%, quarter-on-quarter, in
corresponding period in the previous year. In
Q3. The main growth detractors were the
addition, the city’s top attractions (with the
mining (-7,2%), electricity and water (-5,7%) and
exception of the cableway that was undergoing transport sectors (-5,4%).
routine maintenance) all posted increased
visitor numbers. The Province recorded a lower inflation rate of
4,6% at the end of the third quarter than at the
The number of arrivals at the Cape Town airport also end of second quarter of 2019 (5,3%). While this
increased by 2,1% overall, although foreign arrivals was slightly higher than the national inflation
declined slightly year-on-year. Foreign arrivals, rate (4,1%), it remained well within the inflation
however, are expected to see an increase in the target range (of 3% to 6%).
fourth quarter, given the positive outcomes of the
The number of people employed in Cape
work done by the City, Province and Wesgro on the
Town increased by 19 232 on a quarter-on-
Air Access programme, which secured a biweekly quarter basis, and by 2 108 year on year. This
route expansion to Nairobi, starting in October, and brought the total number of people employed
a new route to Newark, New York, with effect from in the city to 1,6 million in the third quarter of
December 2019. These new routes, together with the 2019. The leading contributors to employment
softening of visa regulations for minors and the roll- growth were the transport (13 414) and private
out of the e-visas and e-gates, will in all likelihood household (12 860) sectors. The trade, hotels
and restaurants sectors recorded the largest
have driven an increase in international passenger
employment decline (-15 470) over the same
arrivals in the fourth quarter of 2019. period.
Ensuring that the city is well positioned to capitalise
Cape Town International Airport recorded a
on foreign buying power, in the form of international year-on-year increase (2,1%) in total passenger
tourism, exports and foreign direct investment, is movements to 2,63 million passengers
becoming increasingly important to mitigate any (second quarter: 2,53 million). The year-on-
economic challenges brought about by currently year growth trend suggests that the tourism
subdued domestic consumer and business sector is recovering after a period of subdued
confidence. performance attributed mainly to the drought
conditions in the region in 2017 and 2018.
It is already clear that renewed load shedding in
the fourth quarter of 2019 had a negative impact Four of Cape Town’s top five tourist attractions
on manufacturing, with December’s PMI indicating recorded quarter-on-quarter increases in the
number of visits in the third quarter of 2019. On
a contraction in the sector. There are concerns
a year-on-year basis, Table Mountain: Cape of
that South Africa, and possibly Cape Town and the
Good Hope showed an increase in number of
Western Cape, may enter a technical recession with visits (14 200). Table Mountain Aerial Cableway
the publication of the fourth quarter GDP figures. recorded a decline in visitors (-45 606), but
In the longer term, it is also likely that economic this can be attributed to an extended closure
challenges will persist, with most analysts forecasting period for required maintenance.
an economic growth rate of 1% for the national
economy in 2020. Construction of 13 602 m2 of new office or
banking space was reported to have been
These challenges are not unexpected, and the City completed in the third quarter of 2019, as
if Cape Town is putting in place growth strategies to well as 3 160 m2 of office or banking space
combat these challenges and chart a better growth alterations. This points to still positive
sentiment towards Cape Town by the financial
path for Cape Town’s economy. At the same, the City
services sector. In the same period, office
needs to place an increased focus on becoming more
vacancy rates remained relatively stable,
resilient in the face of these economic challenges. increasing by just 0,1% to 7,7%. This remains
the lowest vacancy rate across the five largest
Paul Court
metropolitan municipalities in South Africa.
Head: Economic Research
7
01 EPIC 2019: Q3 8
SUCCESS
9
STORIES
EPIC 2019: Q3
Working together with their clients to help improve
their triple bottom line (People, Planet, Profit),
Cape Town AI has three main aims for 2020:
1. E
stablish South Africa as a global hub for
AI talent
2. Create economic opportunities in townships
3. C
ontribute to projects that protect Africa’s wildlife
This year, their main focus has been to create a
multi-disciplinary talent pool, and the company is
continuously recruiting new talent. Cape Town AI
also has a different approach to human resource
development than most companies in South Africa.
Pieter Boon explains: “On Fridays our employees
get time to train and develop themselves and learn
from each other. They only work four days a week.
We believe they are more productive and efficient
that way, and have more fun! This gives them time
to focus on everything that is necessary for their own
development and for their projects. They start in the
morning by telling everybody what they will be doing
for the day and in the afternoon they share what they
have learned with the rest of the team. In this way
THE FOUNDERS everyone learns from each other and continues to
OF CAPE TOWN grow their knowledge.”
AI BELIEVE THAT On their reasons for choosing to establish the
SKILLED ARTIFICIAL
company in Cape Town, Pieter comments that
Cape Town is one of the best places in the world
INTELLIGENCE (AI) to work and live, with the mountains, fresh air,
DEVELOPERS CAN good food, decent rental rates, close proximity to
interesting places and the vibrant culture, especially
CONTRIBUTE TO A in the tech startup field.
BETTER PLANET, Forward thinking businesses are rapidly getting
AND WORK WITH ready for AI. Cape Town AI helps companies to
set up a data-driven business by identifying
THEIR CLIENTS TO priorities and defining their AI and data strategy.
HELP IMPROVE A multi-disciplinary team – or data science squad
THEIR TRIPLE
– then works with the company to create a data
science, artificial intelligence and cloud computing
BOTTOM LINE. road map.
“We’ve also launched the in-house analytics
Cape Town AI was founded at the academy concept, where we create an internal
beginning of 2019 by two Dutch academy so that the company can train not only the
tech entrepreneurs, Pieter Boon technical people but also the people that need to
and Koen Bonenkamp, (artificial make the translation in their business to an AI model.
intelligence). We strongly believe successful companies take an
inclusive approach to AI; they are not focused on
replacing jobs but on creating new business models
and better services.”
10SUCCESS STORIES
Cape Town AI employs multi-disciplinary teams that Enlabeler CEO Esther Hoogstad explains: “South
implement your data science, artificial intelligence Africa’s youth unemployment figures are rising, and
and cloud computing roadmap. it’s very hard to see that a lot of kids with a matric
certificate in their hands, often followed by tertiary
Another initiative by the founders of Cape Town AI is education, are not able to find a job. Either by lack of
Enlabeler, which is a company that offers data labeling social capital, experience or life circumstances – they
services. While the core of its business is focused find themselves in a ‘catch 22’ situation, which is hard
on labeling a company’s data, it is also focused on to get out of.”
creating jobs in township communities around
South Africa. She explains further, “Enlabeler is aiming to create
low-entry data-labeling jobs to (unemployed) young
The data labeling industry is growing at an enormous professionals in the Khayelitsha area (township outside
pace, and Enlabeler’s mission is to land these jobs of Cape Town). It’s important we make the effort to
in South African townships. move out of the city, taking away the existing barriers
“Data labeling is a crucial factor in optimising machine and invite young professionals into our space.”
learning models and high volumes of data-labeling Not only has Cape Town AI a vision of creating jobs
work will be needed for corporates and smaller in South Africa’s townships, they are also passionate
companies to get the most out of their data science about using AI to protect Africa’s wildlife.
and ML efforts.” – Koen Bonenkamp, co-founder of
Cape Town AI and initiator of Enlabeler. Cape Town AI partners with national parks and
technology companies to fight poaching by using
The idea is to create a new financial wealth for people a deep learning approach to analyze (image) data
in townships, allowing them to do the work on their to proactively identify poachers and animals that
mobile phones, eliminate the need to travel by taxi and are in danger.
at the same time also train them in the digital world.
11EPIC 2019: Q3
How was Zindi started?
“Zindi was created as a subsidiary of Ixio Analytics,
a data science consulting company. Ixio was founded
by Megan Yates, a South African working in data
science field since 2012.”
“Zindi came of a realization that there was a growing
pool of data scientists – in Cape Town and across
Africa – looking for opportunities to grow and
apply their skills. At the same time, companies and
organisations in Africa, who were creating massive
amounts of data, were facing the dilemma of how
to fully capitalize on its real value.”
From this realization Megan and her business
partners, Celina Lee and Ekow Duker, saw a
huge opportunity, and Zindi was launched in
September 2018.
“We wanted a space where data scientists in Africa
can build their skills and reputation on real-life
problems and real-life data sets; where they can
connect with organisations and companies that need
them. We also wanted to create channels for African
companies and organisations to test the market of
THE FIRST machine learning and AI, and tap into the talent that
PAN-AFRICAN is out there.”
DATA SCIENCE So how does it work?
COMPETITION “We work with companies to identify and define
PLATFORM. a problem and help them design a data set that
would be needed to build an AI or machine-learning
solution on. We post that challenge on our platform
In conversation with Celina Lee,
and open it up to the community. Data scientists then
co-founder and CEO of Zindi, a
register on Zindi, register for the competition, access
Cape Town-based technology
the data and essentially build machine learning
startup and the first Pan-African data
models on the data.”
science competition platform.
Tell us about data science competitions, or
Founded in 2018, Zindi is the largest
challenges.
African data science competition
platform and works with companies, “The machine learning problem is trying to predict
non-profit organisations and something, or trying to find patterns in the data
government institutions to develop to predict future outcomes. For example, we’re
data-driven competitions, to ‘solve currently running a challenge with a logistics
Africa’s toughest challenges’. company in Nairobi. They do package delivery
within the city, like Uber Eats, but theirs is
person-to-person delivery.
“They lacked a good algorithm for calculating the
estimated time of arrival. So the machine learning
challenge, is to take their historic data and help
them delivery times – taking into account variables
like weather, driver information and delivery GPS
coordinates. It’s this kind of data that we give to the
12SUCCESS STORIES
data scientist to train a model on. They then build an We launched a competition in partnership with Uber
AI/machine learning model on that data to accurately Movement and SANRAL, creating a challenge to help
predict how long it will take for a package to be SANRAL predict when and where road accidents
delivered. may happen, using AI. (Find details about the Uber
Movement SANRAL Cape Town Challenge here).
“These competitions are open for about 3 months and
each data scientist can develop as many solutions as Is using AI and machine learning for the benefit of
they want and continually improve them. There’s a live society important to you?
leader board, where they’re ranked based on their
“Absolutely. While Zindi is a for-profit company, we
best submission. When the competition ends, the top
have a social mission and are passionate about solving
three data scientists win prizes and all solutions are
problems which will also have a positive impact on
given to the company that needed it.
society – such as Farm Pin, a startup that leverages
“This offers three different perspectives on how to the power of satellite imagery for agriculture, and
solve the problem, which can be customized to fit Standard Bank’s Tech Impact Challenge.
their needs.”
Tell us more about Zindi’s presence in Africa?
Why choose Cape Town as your base and are you
“We’re based in Cape Town, but our reach is pan-
doing any work with the local authorities here?
African. South Africa, Nigeria and Kenya currently
“Cape Town is a great place for a tech or AI startup; have the most users, but countries such as Tanzania,
there’s a vibrant startup scene, and being close to UCT Uganda, Tunisia and Senegal are coming up strongly.
and Stellenbosch University offers us access to a great we have data scientists in our network from practically
pipeline of talent in the city. every country in Africa now.”
Find out how Zindi can help your organisation, visit
https://zindi.africa/.
1302
OVERVIEW 15
EPIC 2019: Q3
CAPE TOWN OVERVIEW
2019: QUARTER 3
GROSS DOMESTIC R3 144 539 CAPE TOWN GROSS GEOGRAPHIC
PRODUCT (GDP) million PRODUCT AND EMPLOYMENT
Of South Africa’s South Africa CONTRIBUTIONS TO SA, 2018e
R3 144 539 million
GDP generated in the 100%
third quarter of 2019,
the Western Cape
accounted for R436 463
million. a Whilst GDP
data is not available
at the city-level on a
quarterly basis, annually,
R436 463 47,5%
75%
42,8%
Cape Town typically
million
contributes around 70%
Western Cape
of the provincial GDP.b
a
At constant 2010 prices. Source: Quantec, 2019.
b
At current prices. Source: IHS Markit, 2019.
50%
GDP GROWTH RATE Western South 10,0%
Cape Africa 7,7%
During the third quarter
of 2019, the Western Cape
-0,3% -0,6%
had a quarter-on-quarter
GDP growth rate of -0,3%,
13,2% 14,9%
compared to a national
growth rate of -0,6%.c
25%
7,6% 6,9%
c
At current prices. Source: IHS Markit, 2019.
8,3% 9,7%
GDP PER CAPITA
9,9% 9,5%
In 2018, South Africa
0%
had a GDP per capita,
Employment GDP
of R84 976, while the (formal and informal) (current prices)
Western Cape’s GDP per
capita was R100 824 Rest of SA Buffalo City Mangaung
Tshwane Nelson Mandela Bay Johannesburg
and Cape Town’s was South Western Cape Ekurhuleni eThekwini Cape Town
R110 137.d Africa Cape Town
d
At current prices. Source: IHS Markit, 2019. GGP at current prices. Source: IHS Markit, 2019.
e
166
1OVERVIEW
INFLATION POPULATION
At the end of the third South Africa has
quarter of 2019, South 58 775 022 people:
4,5% 5,3%
Africa had a lower rate of
6 844 272 (11,6%) live in
inflation of 4,1%, compared
the Western Cape and,
to the Western Cape which
had a rate of 4,6%.f South Western of those, 4 488 546 are
Africa Cape resident in Cape Town .g
f
Source: Statistics South Africa (StatsSA), 2019. g
Source: Statistics South Africa (StatsSA), 2019.
GINI COEFFICIENT
In 2018 South Africa had a Gini coefficient* of 0,63, South Cape
Africa 0,63 0,62 Town
while Cape Town had a slightly lower value of 0,62.h
* T he Gini coefficient measures inequality in levels of income.
h
Source: IHS Markit, 2019.
SECTORAL SHARES, CAPE TOWN GROSS VALUE ADDED (GVA) VERSUS NATIONAL
GVA, 2018i
SA GVA 2,4%
Agriculture and fishing 1,0%
Ca p e To w n GVA
8,1%
Mining 0,2%
13,2%
Manufacturing 14,6%
3,8%
Electricity 2,2%
3,9%
Construction 4,8%
15,0%
Trade 17,8%
9,8%
Transport 11,9%
19,7%
Finance and other business 29,0%
24,0%
Community services 18,6%
0% 10% 20% 30%
i
At current prices. Source: IHS Markit, 2019.
VISITOR AIR PASSENGER
ATTRACTIONS MOVEMENTS
In the third quarter Of the 9 872 745 passenger
of 2019, tourists movements through South
and residents made Africa’s three international
849 465 visits to airports k during the third
Cape Town’s five 849 465 quarter of 2019, 2 633 286
major attractions j. Cape Town top were through Cape Town
5attractions
International Airport l.
j
Cape Town Tourism and Wesgro, 2019. k
Cape Town, OR Tambo and King Shaka.
l
Source: ACSA, 2019.
117
7EPIC 2019: Q3
LABOUR OVERVIEW
2019: QUARTER 3
Working-age
population:
Broad labour force:
2 967 498
2 122 505 Employed: Searching unemployed:
1 607 982 452 660
Discouraged and
other non-searching
Informally employed: unemployed:
205 424 61 863
Labour force participation rate (strict) = 69,4% Absorption rate = 54,2% Dependency ratio = 44,1%
Source: Statistics South Africa, Quarterly Labour Force Survey, 2019 Quarter 3, October 2019.
STRICT VS BROAD UNEMPLOYMENT RATES FOR SOUTH AFRICA
AND CAPE TOWN, 2013 Q1 - 2019 Q3
40%
35%
30%
25%
20%
Q1 2014
Q1 2015
Q1 2016
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q2 2014
Q3 2014
Q4 2014
Q2 2015
Q3 2015
Q4 2015
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Cape Town strict South Africa strict Cape Town broad South Africa broad
Source: Statistics South Africa, Quarterly Labour Force Survey, 2019 Quarter 3, October 2019.
188
1OVERVIEW
1903 EPIC 2019: Q3 20
ECONOMIC
GROWTH
Gross domestic product (GDP)
growth is one of the most widely
used measures of economic
performance in a country or
region. It provides an indication
of the level of value-added
production that takes place in
an economy during a specific
period. Large cities such as
Cape Town are typically the loci
of economic production, and
are often the main drivers of
economic growth in a region.
21EPIC 2019: Q3
QUARTER-ON-QUARTER
GDP-R GROWTH RATE
The Western Cape economy contributes around While GDP-R (regional
14% of South Africa’s GDP. The province’s economic gross domestic product) In line with the
performance is strongly related to the country’s economic statistics for Cape Town are contraction of the
performance and, in line with the contraction of the not available on a quarterly national economy
national economy (by -0,6%) in the third quarter of 2019, basis, the performance (by -0,6%) in the
the Western Cape economy contracted by 0,3%. As with of the metropolitan third quarter of 2019,
the economic performance at a national level, the Western municipality’s economy can the Western Cape
Cape’s contraction in the third quarter was broad based, be expected to typically economy contracted
with six of the ten sectors recording negative growth on mirror that of the provincial by 0,3%.
a quarter-on-quarter basis. The largest contraction in the economy. This is because
third quarter was in the mining sector which contracted by the city contributes around 70% of the provincial
7,2%, while the largest [positive] growth was in the trade economic output (IHS Markit, 2019).
sector (2,7%). Despite the unexpectedly poor quarter-
on-quarter results, the year-on-year data indicates a more On average, in the last 10 years, the variation of the city’s
muted performance. As figure 1 shows, on a year-on-year gross geographic (GGP) growth rate from the provincial
basis, the province’s economy grew by 0,3% in the third rate has been 0,2 of a percentage point. If this were to
quarter of 2019, a decrease of 1 percentage point from hold true for the third quarter of 2019, a plausible range
the previous quarter. for Cape Town’s quarter-on-quarter economic growth is
between -0,1% and -0,5%.
FIGURE 1: REAL GGP GROWTH FOR THE WESTERN CAPE,
QUARTER 1, 2008 TO QUARTER 3, 2019
6%
4%
2%
0%
-2%
-4%
-6%
Q1 2014
Q2 2014
Q3 2014
Q1 2015
Q2 2015
Q2 2016
Q4 2014
Q3 2015
Q1 2016
Q4 2015
Q3 2016
Q1 2017
Q2 2017
Q4 2016
Q3 2017
Q1 2018
Q2 2018
Q4 2017
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Quarter-on quarter Year-on-year
Source: Quantec, December 2019.
22ECONOMIC GROWTH
SECTORAL DRIVERS OF ECONOMIC
GROWTH IN THE WESTERN CAPE
The Western Cape economy’s performance in the third notably the unexpected “sharp decline” of the transport
quarter of 2019 is characterised by poor performances sector (BER, 2019a).
across most of its sectors. The most prominent contributors
to the Western Cape’s total gross value added (GVA) are Similar sectoral growth rates can be expected for
the finance, trade and manufacturing sectors; of these, Cape Town, as the city is the major contributor to most
the trade and finance sectors were the largest positive economic sectors in the province. In particular, it comprises
contributors to growth in the third quarter of 2019, adding 82% of the Western Cape’s finance and business services,
0,49 and 0,42 of a percentage point, respectively, to growth 77% of its transport, 73% of its wholesale and retail trade,
during this period. The majority (six) of the Western Cape’s 69% of its manufacturing, and 63% of its construction
sectors contracted in the third quarter of 2019, subtracting sectors (IHS Markit, 2019). As such, the city is likely to
a combined 1,5 percentage points from total growth. have experienced very similar growth rates to those at a
Of these, the manufacturing and transport sectors were provincial level in these sectors in the third quarter of 2019.
the largest negative contributors towards growth, each
subtracting 0,57 of a percentage point. In contrast to Cape Town’s contribution to the tertiary
sector output of the province, its’ contribution to the
From an individual sectoral performance perspective, province’s total primary sector GGP is only 20% (IHS Markit,
the agricultural and manufacturing sectors, which have 2019). Thus, it is difficult to make inferences about the
experienced fluctuating performances for several years, performance of the city’s primary sector based on primary
continued this trend in the third quarter of 2019. The sector GGP growth in the Western Cape. However, even if
agricultural sector recorded its third consecutive quarter Cape Town’s primary sector (agriculture, in particular) did
of negative growth (-3,6%), albeit an improvement on mirror provincial trends, it is unlikely that this would have
the previous quarter, whilst the manufacturing sector had a large impact on the overall growth rate of the city,
experienced negative growth (-3,8%) in the third quarter as the primary sector contributes only 1% to Cape Town’s
of 2019 following positive growth in the previous quarter. total GGP. Rather, the performance of the city’s economy
The construction sector also experienced its fifth in the third quarter of 2019 would have been driven by
consecutive decline (-2,7%), and the transport sector its the performance of the finance, community services and
third consecutive decline (-5,4%). While the mining sector trade sectors, which, in 2018, comprised 35%, 17%, and
recorded the largest quarter-on-quarter contraction (-7,2%) 16% of the city’s economy, respectively. Given that two of
in the third quarter of 2019, its impact remains limited these sectors (finance and trade) were the largest positive
as it constitutes a very small share of economic activity contributors to economic growth at the provincial level in
in the province (0,2%) (Quantec, 2019). The weaker than the third quarter, it is reasonable to believe that Cape Town
expected GDP performance, applicable to both provincial may have experienced slightly higher economic growth
and national economies, is as a result of “broad-based than the province in this period.
weakness across the key sectors of the economy”, and
FIGURE 2: SECTORAL REAL GDP-R GROWTH RATES
IN THE WESTERN CAPE, QUARTER 3, 2019
Agriculture, forestry and fishing -3,6
Mining and quarrying -7,2
Manufacturing -3,8
Electricity and water -5,7
Construction -2,7
Trade, hotels and restaurants 2,7
Transport and communication -5,4
Finance, real estate and business services 1,6
Community, social and other personal services 0,3
General government services 2,3
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Quarter-on-quarter % change
Source: Quantec, December 2019.
2304 EPIC 2019: Q3 24
INFLATION
Price fluctuations of goods
and services in an economy
are measured by the consumer
price index (CPI) inflation rate
and producer price index (PPI)
inflation rate. The CPI measures
the change in the cost of living
for households and the PPI
measures the change in the
cost of production.
25EPIC 2019: Q3
INFLATION OVERVIEW
Overall, by the end of the third quarter of 2019, the CPI products as well as metals,
decreased to 4,1% from 4,5% at the end of the second machinery, equipment and By the end of the third
quarter of 2019. As illustrated in figure 3, the CPI computing equipment. quarter of 2019, the
recording for July was 4%, increasing slightly to 4,3% CPI decreased to 4,1%
in August and decreasing to 4,1% in September 2019. Interestingly, the from 4,5% at the end
Encouragingly, the headline inflation rate continued to percentage gap between of the second quarter
remain below the upper end of the inflation target range the CPI and PPI decreased of 2019.
(6%) for the third quarter - this has been the case since significantly from
the second quarter of 2017. According to Statistics South 2,1 percentage points
Africa (2019), the main categories contributing to the in April 2019 to recording a zero percentage gap in
overall CPI inflation rate for September 2019 included September 2019 as both logged a recording of 4,1%.
alcoholic beverages and tobacco, as well as education,
Figure 1 also illustrates changes in the repurchase rate
with each of these categories recording inflation rates of
(repo rate). As indicated in the graph, the repo rate
above 6%. According to the Monetary Policy Committee
decreased by 25 basis points from 6,75% to 6,5%, as
(MPC) statement of September 2019 (South African
decided by the MPC in July 2019. According to the MPC
Reserve Bank [SARB], 2019a), the lower headline inflation
statement of July 2019 (SARB, 2019b), key reasons for the
is a result of South Africa’s gross domestic product
downward decision were the stronger rand performance
rebounding (in the second quarter) from the contraction
[at that point], moderate to lower inflation expectations
experienced in the first quarter of 2019, as well as food
for 2020 and 2021 as well as the subdued food price
and service price inflation remaining [overall] subdued.
inflation. Although the repo rate has been revised
For the third quarter of 2019, the PPI decreased down, the MPC will closely monitor overall inflation
significantly after averaging a recording of 6% during the performance, the level of economic activity, business
second quarter to average a recording of 4,5% for the and investment confidence, global economic indicators
third quarter. It recorded monthly loggings of 4,9% in as well as the price of food, electricity and wages. The
July, decreasing to 4,5% in August and further to 4,1% in MPC decided to keep the repo rate unchanged during
September 2019. The main inflationary contributors to PPI the September 2019 meeting with lower inflation
in September (in terms of final manufactured products) expectations and improved GDP performance as its main
were the prices of food products, beverages and tobacco reasons (SARB, 2019a).
products; coke, petroleum, chemical, rubber and plastic
FIGURE 3: CPI AND PPI TRENDS FOR SOUTH AFRICA,
JANUARY 2013 TO SEPTEMBER 2019
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q3 2019
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Reserve Bank inflation target range Repo rate CPI PPI
Source: CPI and PPI extracted from Statistics South Africa, 2019; repurchase rate extracted from SARB, 2019.
26INFLATION
GEOGRAPHICAL INFLATION
The Western Cape recorded an inflation rate of 4,6% at of the third quarter of 2019, with the Free State and
the end of the third quarter of 2019. This was lower than Limpopo being the only provinces to record an increase
its inflation rate at the end of the second quarter of 2019, whilst KwaZulu-Natal remained unchanged when
which was 5,3%. Although remaining within the inflation compared to June 2019. The Western Cape recorded
target range at the end of the quarter, the provincial the highest inflation rate throughout the quarter with
inflation rate remained higher than the national rate of an average of 4,8%, followed by Limpopo (4,7%), and
4,1%. Figure 4 illustrates inflation rates recorded in the Northern Cape (4,4%), whilst the North West (3,7%)
third quarter of 2019 across all nine provinces in the recorded the lowest average inflation rate in the third
country. In comparison to the end of second quarter quarter of 2019. Positively, all nine provinces continue to
of 2019, the majority of the provinces recorded slight remain within the inflation target range of 3% and 6%.
decreases in their respective inflation rates by the end
FIGURE 4: CPI INFLATION RATE AT A PROVINCIAL LEVEL, JULY TO SEPTEMBER 2019
6%
5%
4%
3%
2%
1%
0%
Western Cape Eastern Cape Northern Cape Free State Kwazulu-Natal North West Gauteng Mpumalanga Limpopo
Reserve Bank inflation target range July 2019 August 2019 September 2019
Source: Statistics South Africa, November 2019.
The higher overall inflation rate at the provincial level Food price inflation in the Western Cape increased from
(compared to the national level) for the third quarter of 2,8% in July to 3,0% in September 2019. Similarly, food
2019 can largely be attributed to housing and utilities’ price inflation on a national level increased from 3,3% in
price inflation which was recorded at 7,1% for the Western July to 4,0% in September. Although food price inflation
Cape and 4,9% at the national level in September. has remained on the lower risk side, the MPC noted in
Within this category the disparity between prices at the their July and September statements (SARB, 2019a and
provincial and national levels was notable in owners’ 2019b, respectively) that it is expected to increase further
equivalent rent1 and actual rentals for housing which and will be closely monitored. Significant disparities in
were recorded at 6,5% and 6,6%, respectively, for the inflation rates between the Western Cape and the country
province, compared to 2,6% and 3,4%, respectively, at the as a whole were also observed within the non-alcoholic
national level. Water and other services’ 2 price inflation beverages’ price inflation (4,8% and 5,2%, respectively)
in the Western Cape remained high in the third quarter, and in alcoholic price inflation (5,4% and 6,5%,
recording 6,8% for September 2019, however was lower respectively) at the end of September 2019. The Western
than the inflation rate in this category at a national level Cape also recorded a higher restaurants and hotels price
which was 7,1% in September 2019. inflation (6%) than that recorded at a national level (3,4%)
at the end of this quarter.
Notably, electricity and other fuels’ price inflation was
higher on a national level (11,6%) compared to the Public transport price inflation on both a national and
provincial level (9,7%) for September 2019. The high rate provincial level logged recordings above 6% for July
of inflation in this category could be attributed to the (7,9% and 8,9%, respectively) but decreased substantially
average annual electricity increase of 13,87% for Eskom by the end of the quarter (3,4% and 4,6%, respectively).
direct customers (implemented on 1 April 2019) and
an average price increase of 15,63% for municipalities
(implemented on 1 July 2019) as approved by National
energy regulator of South Africa (NERSA, 2019).
1
As defined by Statistics South Africa, the category “owners’ equivalent rent” measures the opportunity cost to the owners of forgoing a
rental income by living in rather than renting out the house they own (Statistics South Africa, 2017).
2
As defined by Statistics South Africa, the category “water and other services” includes water supply, rates, taxes and levies (Statistics South
Africa, 2017).
2705 EPIC 2019: Q3 28
LABOUR
MARKET
The labour market is the point
at which economic production
meets human development.
As such employment
creation and unemployment
reduction are top priorities
for all spheres of government.
Labour market performance
is tracked through a variety of
indicators, many of which are
reflected on in this section.
29EPIC 2019: Q3
CAPE TOWN’S LABOUR MARKET PERFORMANCE
Cape Town’s working age population (2,96 million) and Formal employment
labour force (2,06 million) increased on both a quarter- recorded an increase on a Cape Town’s labour
on-quarter and year-on-year basis. Similarly, employment quarter-on-quarter (by 10 force increased on
increased on both a quarter-on-quarter (19 232) and 839) basis and a decrease both a quarter-on-
year-on-year (2 108) level recording a total of 1,6 million on a year-on-year basis (by quarter (19 232) and
individuals. The greater increase in employment compared 28 050) to record a total year-on-year (2 108)
to the working age population for this quarter meant that of 1,29 million individuals. level recording a
the labour absorption rate increased to 54,2% from 53,8% Informal employment total of 1,6 million
in the previous quarter. The labour force participation decreased on a quarterly individuals in the third
rate, also, increased by 0,7 of a percentage point to 69,4% basis (5 386) and increased quarter of 2019.
for the third quarter of 2019. On a year-on-year level both by 26 396 on a year-on-
the labour absorption and labour force participation rates year basis to record a total
recorded decreases when compared to the same period of 205 424 individuals in the third quarter. The share of
in 2018. total employment contributed by informal employment
decreased slightly to 12,8% from a previous recording of
13,3% in the second quarter of 2019.
30LABOUR MARKET
EMPLOYMENT COMPARISON OF METROS
To measure Cape Town’s job creation performance, in employment) and Ekurhuleni (an increase of 23 327 in
a comparison with other metropolitan municipalities employment) following closely. Cape Town and Nelson
(metros) in the country is helpful. In the third quarter Mandela Bay also added to employment with an increase
of 2019, Cape Town had the second largest number of of 19 232 and 16 817, respectively, whilst Johannesburg
employed people, with 1,6 million people employed in was the only metro to shed jobs for this quarter (a
the city, second only to Johannesburg where 1,9 million decrease of 35 928). On a year-on-year level, four metros
people were employed. This is to be expected as added to employment while two metros recorded
Johannesburg has a significantly larger population. negative employment growth. Johannesburg, similar to
its quarterly performance, shed the most jobs (a decline
Turning attention to employment trends in the third of 85 119) with eThekwini following thereafter (recording a
quarter of 2019, the majority of the metros displayed decrease of 27 473). Ekurhuleni added the most jobs with
positive employment growth, while only one metro an increase of 72 869 followed by Tshwane (an increase of
recorded negative employment growth on a quarter- 35 288), Nelson Mandela Bay (an increase of 6 339) and
on-quarter basis (refer to figure 5). Tshwane added the Cape Town (an increase of 2 108) when compared to third
most jobs (23 835) with eThekwini (an increase of 23 501 quarter of 2018.
FIGURE 5: EMPLOYMENT COMPARISON WITH OTHER METROS,
QUARTER 2, 2019 VERSUS QUARTER 3, 2019
2 000 000
1 500 000
1 000 000
500 000
0
Cape Town Tshwane Nelson Johannesburg Ekurhuleni eThekwini
Mandela
Bay
2019 Q2 2019 Q3
Source: Statistics South Africa, Quarter Labour Force Survey, 2019 Quarter 3, October 2019.
31EPIC 2019: Q3
UNEMPLOYMENT IN CAPE TOWN
The number of unemployed people in Cape Town the other metros. Nelson
increased on both a quarter-on-quarter (10 943) Mandela Bay, on the other The relatively
and a year-on-year (24 009) basis to record a total of hand, had the highest strict low growth of
452 660 individuals at the end of the third quarter. The unemployment rate (34,9%) employment and
relatively low growth of employment and an increase as well as the highest an increase in
in unemployment for this quarter resulted in a higher expanded unemployment unemployment for
strict unemployment rate (22%) when compared to the rate (35,3%) for this quarter. this quarter resulted
previous quarter (21,8%). Similarly, on a year-on-year Ekurhuleni, also, had a in a higher strict
level, the minimal employment growth relative to the 35,3% recording for its unemployment rate
increase in unemployment allowed for an increase in expanded unemployment (22%) when compared
the strict unemployment growth compared to the third rate. Johannesburg had the to the previous
quarter of 2018 (21,1%). The youth unemployment rate largest quarter-on-quarter quarter (21,8%).
in Cape Town, defined as the strict unemployment rate increases for both its strict
for individuals aged 15 to 24, was estimated at 45,6% in (8,6 percentage points) and
the third quarter of 2019, having increased from 44,6% expanded (1,2 percentage points) unemployment rates
in the previous quarter and on a year-on-year level when compared to the previous quarter, whilst Nelson
increasing from 44,3% in the third quarter of 2018. While Mandela Bay had the largest decrease for both its strict
this is below the national youth unemployment rate of (1,6 percentage points) and expanded (2,5 percentage
58,2% (increasing from 56,4% in the previous quarter), points) unemployment rates when compared to the
it is nonetheless markedly high by developing-country second quarter of 2019. Notably, table 1 indicates the
standards and continues to pose a key challenge to large differences in the relationship between strict and
economic policymakers in the city. expanded unemployment rates in each of the six metros,
with Nelson Mandela Bay recording the lowest difference
Whilst traditional comparisons of Cape Town’s of 0,4 of a percentage point difference between the two
unemployment trends with that of South Africa as a whole rates of unemployment, whereas eThekwini recorded a
are important, it is perhaps more revealing to compare 9,2 percentage points difference, the largest amongst
these trends to other metros that have similar labour the metros. Cape Town continues to record relatively low
market dynamics (see table 1). On a quarter-on-quarter differences between the two rates of unemployment
basis, eThekwini had the lowest strict unemployment rate (2,3 percentage points difference). This can be attributed
(21,5% down from a previous 21,9%) while Cape Town to the city having a relatively small number of discouraged
had the lowest expanded unemployment rate of 24,2% work-seekers in the metro.
(increased from a previous 24,0%) when compared to all
TABLE 1: OFFICIAL (STRICT) VERSUS EXPANDED (BROAD)
UNEMPLOYMENT RATES
OFFICIAL (STRICT) EXPANDED (BROAD)
METRO
2019 Q3 2019 Q2 2018 Q3 2019 Q3 2019 Q2 2018 Q3
Cape Town 22,0 21,8 21,1 24,2 24,0 22,9
eThekwini 21,5 21,9 18,2 30,6 30,5 27,5
Ekurhuleni 31,0 31,8 30,9 35,3 36,0 35,6
Johannesburg 32,4 23,7 29,2 34,6 33,4 31,5
Nelson Mandela Bay 34,9 36,4 36,4 35,3 37,8 36,7
Tshwane 28,4 29,9 29,4 32,6 33,4 34,9
Source: Statistics South Africa, Quarterly Labour Force Survey, 2019 Quarter 3, October 2019.
32LABOUR MARKET
SECTOR EMPLOYMENT TRENDS FOR CAPE TOWN
Figure 6 presents the change in the level of employment employment growth
by sector within Cape Town in the third quarter of when compared to the The sectors that
2019. Seven sectors made a positive contribution to third quarter of 2018. The added the most to job
employment creation when compared to the previous manufacturing sector creation in Cape Town
quarter, with the highest contributions recorded in added the most jobs with in the third quarter of
the transport and communication (13 414) as well as an increase of 15 033 jobs. 2019 were transport
private households (12 860) sectors. Further significant Finance, real estate and and communication
contributions that added to employment came from business services (9 459), (13 414), private
finance, real estate and business services (8 961) as private households (6 122) households (12 860)
well as electricity and water (3 941) sectors. Smaller as well as community, social and finance, real
positive contributions to employment were recorded and other personal services estate and business
in manufacturing (955); agriculture, forestry and fishing (6 054) sectors added services (8 961).
(920) as well as mining and quarrying (641). The remaining significantly to employment
sectors experienced a reduction in employment when growth. Trade, hotels
compared to the previous quarter, namely trade, hotels and restaurants (2 454) as well as electricity and water
and restaurants which shed the most jobs (-15 470), (567) sectors also added positively to employment. The
followed by the community, social and other personal construction sector recorded the largest decrease in
service (-5 562) and construction (-1 427) sectors. employment (-30 636). Further reductions in employment
were recorded in transport and communication (-2 825);
On a year-on-year basis six sectors displayed positive agriculture, forestry and fishing (-2 360) as well as mining
employment growth and four sectors recorded negative and quarrying (-1 759) sectors.
FIGURE 6: QUARTERLY AND ANNUAL CHANGE IN EMPLOYMENT
PER SECTOR FOR CAPE TOWN, QUARTER 3, 2019
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity and water
Construction
Trade, hotels and restaurants
Transport and communication
Finance, real estate and business services
Community, social and other personal services
Private households
-40 000
-30 000
-20 000
-10 000
20 000
0
10 000
Quarterly change Annual change
Source: Statistics South Africa, Quarterly Labour Force Survey, 2019 Quarter 3, October 2019.
3306 EPIC 2019: Q3 34
INFRASTRUCTURE
Cape Town is often promoted as
the gateway to South Africa, and
to Africa more generally. This
status is sustained by the city’s
well-developed transportation
infrastructure, with Cape Town
being home to South Africa’s
second-busiest airport as well
as (historically) its second-
busiest container port. This
section reviews infrastructure
developments in relation to
Cape Town’s port and airport.
35EPIC 2019: Q3
CONTAINER HANDLING
Container traffic is very seasonal, as figure 7 indicates, thus of 2018 to 226 764 TEUs in the third quarter of 2019,
it is best to compare total containers handled, as measured reflecting a positive growth rate of 2,63%. In contrast,
in twenty-foot equivalent units (TEUs3), over the period the ports of Durban and Ngqura experienced decreases
of a year. In the third quarter of 2019, the Port of Durban4 in container handling of 5,53% and 0,32%, respectively,
was once again the largest container handling port in when compared to the same period in 2018. The positive
the country with 756 760 TEUs (comprising 61,15% of all performance of the Port of Cape Town was outweighed
containers handled in South Africa), followed by the Port by the decline in the other two ports which resulted in a
of Cape Town (18,32%) and the Port of Ngqura5 (16,73%). year-on-year decrease of 5,33% in total container handling
at a national scale in the third quarter of 2019, reflecting
The number of containers handled at the Port of Cape challenging economic conditions.
Town increased from 220 947 TEUs in the third quarter
FIGURE 7: TOTAL CONTAINERS HANDLED,
QUARTER 1, 2015 TO QUARTER 3, 2019
500 000
450 000
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
Q1 2015
Q2 2015
Q3 2015
Q1 2016
Q2 2016
Q4 2015
Q3 2016
Q1 2017
Q2 2017
Q2 2018
Q3 2018
Q4 2016
Q3 2017
Q1 2018
Q4 2017
Q4 2018
Q1 2019
Q2 2019
Q3 2019
South Africa Cape Town Ngqura Durban
Source: Transnet National Ports Authority (TNPA), November 2019.
The Transnet National Ports Authority (TNPA) is well as have a positive impact on the overall reliability
responsible for the management of and ensuring a of port operations and service at the Port of Cape Town
“safe, effective and efficient economic functioning of (Whitehouse, 2019b).
the national port system” (TNPA, 2019b). As part of its
on-going initiative to improve services at the Port of Additionally, the TNPA’s Dredging Services division has
Cape Town, the TNPA has assigned new tugs to the Port begun another maintenance dredging campaign for the
of Cape Town to improve marine efficiency as well as year taking place within the Duncan Dock at the Port of Cape
support the port’s ability to accommodate increased Town; this will ensure the port provides safe navigational
demand from large commercial vessels, thus enhancing channels and berthing facilities for shipping (Arnoldi,
the port’s competitiveness (Whitehouse, 2019a). The 2019). These initiatives are anticipated to improve the
TNPA is also implementing a craft replacement strategy competitiveness of the Port of Cape Town and potentially
at this port which includes the acquisition of two new bring the performance of this port in line with international
workboats and a helicopter for marine pilot6 transfers best practice as envisioned by National Treasury through its
which will help improve marine turnaround times as economic policy document (National Treasury, 2019).
3
A TEU (20-foot equivalent unit) is an inexact unit of cargo capacity, based on the volume of a 20-foot-long (6 m) container. There is a lack of
standardisation with regard to height, ranging between 4 feet 3 inches (1,30 m) and 9 feet 6 inches (2,90 m), with the most common height
being 8 feet 6 inches (2,59 m). The 40-foot (12,2 m) or 45-foot (13,7 m) containers - the sizes most frequently used are both defined as two TEU.
4
The Port of Durban is located in the eThekwini metro municipality.
5
The Port of Ngqura is located in the Nelson Mandela Bay metro municipality.
6
Marine pilots are sailors that ensure safe navigation of ships in their waters. They board ships entering or exiting the port or harbour, and
navigate them safely in and out avoiding submerged rocks and other hazards.
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