The annual Western Cape Provincial Economic Review and Outlook (PERO)
provides the backdrop to the annual Western Cape Medium Term Budget
Policy Statement. It thus represents a potential link with the intention/plans of
the Western Cape Government (WCG) to facilitate an environment
conducive to growing the economy and sharing the benefits of growth
among a wide spectrum of citizens. Rising unemployment, particularly among
young people, and uncertainty within the global economy are amongst the
biggest risks to the Province’s goal of inclusive economic growth and
integrated development. Therefore, it is necessary to obtain a better
understanding of the trends, patterns and developments within the Western
Cape (WC) economic sectors, and specifically of how these are linked to the
labour market’s performance in the WC economy.
The principal challenge facing the Province is to alleviate poverty, improve
welfare and grow the economy whilst creating jobs through appropriate
policy initiatives. To decide on the requisite policy actions, the provincial
government requires an improved understanding of the real economy, in
particular of industry activity, their prospects and the constraints they face.
Therefore, the 2012 PERO has been set the task of delving deeper into certain
aspects of the WC economy, including:
An analysis of trends in WC growth, sector performance and of the drivers
and constraints within sectors, both in terms of domestic and export
production;
Mindful of the importance of export production as a source of
employment-creating growth, a review of the export potential and
achievements of export producers as well as the destination of WC
exports;
The consideration of initiatives to address the paucity of supply-side micro
level data;
WESTERN CAPE PROVINCIAL ECONOMIC REVIEW AND OUTLOOK 2012
2
A focus on non-traditional tradable manufacturing sectors of the
economy which are susceptible to provincial government intervention;
and
The impact of socio-economic variables on the welfare of society.
In reviewing recent developments in the WC economy and the outlook for
future growth and development, two elements need to be considered. The
first concerns the global economic environment, which is crucial to the region
with its open economy, especially as an exporter of goods and services. The
second element is the policy initiatives that exist at the provincial and national
level, as well as institutional developments related to policy interventions.