Economic Growth and Trends
The city's higher-than-average household income combined with strong growth in that income translates into significant purchasing power.
The Index of Buying Power (IBP) weights data around population, income and retail sales to indicate the buying power attributable to an area, as a percentage of the national total.
The City's IBP in 2004 was 0,14 indicating that 14 percent of South African demand for goods and services emanates from Joburg. The second largest consumer market is Cape Town, with an IBP of 0,11. In comparison, eThekwini commands only nine percent of demand and Nelson Mandela Metro three percent of the country's goods and services.
Expenditure in the City grew particularly strongly between 1997 and 2001, but slowed in the last three years to 2004. The high base from which expenditure growth is coming can explain this slowdown.
Nonetheless, growth remains strong by almost any standard. Even with this drop in the pace of annual growth, the City's consumer expenditure market remains the most important in the country due to its absolute size. The high level of purchasing power and growth in household income and expenditure shows a strong local support base for the City's trade sector.
Sectoral analysis of growth
Unpacking sector growth assists in understanding the performance of the City's nine major sectors in their own right and when compared to national and other urban centre trends offers a deeper picture of the drivers of the City's growth.
For each sector four key variables have been analysed: Firstly, the sector's average annual growth has been considered using the percentage change of gross value added. Secondly each sector's contribution to the overall City's GVA has been examined. This describes the mix of the City economy and indicates trends regarding changes in the fundamental structure of the City's economy.