Economic Growth and Trends
INCE Global Insight's Joburg-based data collection began in 1996 (that is, annual growth rates are available from 1997), the City has shown positive real GDP growth peaking at 6,5 percent in 2002. Additionally, since 1996, the City's GDP growth rate has outpaced the national growth rate in GDP, due largely to the dominance of the fast-growing financial and business services sector in Joburg's economy, which has consistently outperformed average growth rates.
The City contributes 17 percent of the national economy's Gross Value Added (GVA) and 44 percent of Gauteng's GVA and Joburg has generally outperformed both the national and provincial economy.
However, the data indicate that the relationship between the City's growth and national growth appears to be largely counter-cyclical, meaning the city's economy slows while the national economy speeds up and vice versa.
This relationship could be partially explained by the greater relative importance of the agricultural, mining and manufacturing sector in the national economy, such that strong growth in these sectors would increase national GVA growth substantially while having little impact on City GVA growth.
It could be argued that the predominance of head offices and share owners is likely to make income levels - and hence economic activity - in Joburg more dependent on cyclical shifts in corporate profitability than the economy as a whole. According to data published by the South African Reserve Bank, the net operating surpluses of incorporated businesses rose dramatically in 2001 and 2002, and then slowed in 2003 and 2004 - which tends to support the evidence shown above.
The key factor is that Joburg's economy has almost consistently outperformed both the national and Gauteng economies, to a considerable degree. Between 1996 and 2004, the Joburg economy grew at a real annual average rate of 4,5 percent, while Gauteng's economy expanded at a pace of 3,9 percent, and the national economy at 2,9 percent.
For the period 2000 to 2004, Joburg accelerated its real growth rate, to an average of five percent per annum.