Highlights from the State of the City 2014 report
l IN THE decade-and-a-half between 1996 and the 2011 census, Cape Town – Africa’s 10th most populous city – grew by 46 percent, from 2.5 million to 3.7 million people.
It is estimated to have grown by another almost 100 000 since. The population of about 3.8 million makes the city home to just over 64 percent of the province’s population.
The future city will have a growing population, coupled with a continual inflow of people from neighbouring provinces and countries. The population is expected to grow to 4.2 million by 2022, and to 4.6 million by 2032.
The clearest trend is the steady growth in the number and proportion of black Africans between 1996 and 2011 (at a rate of 124 percent), and a rapid decrease in the difference between the size of the black African and coloured population, from a 1996 variance of 23 percent, with the coloured population significantly larger, to 3.8 percent in 2011.
Most new arrivals between 2001 and 2011 were black Africans (58 percent) and whites (22 percent), and mainly in the 25-64 age group.
The proportion of children up to 14 dropped from 28 percent in 1996 to 25 percent in 2011, while the economically active population (15 to 64) rose from 66 to 70 percent, while the elderly population (65 and up) grew slightly from 5 to 5.5 percent.
Half of the economically active population was employed in 2011.
This suggests Cape Town’s economy is not growing fast enough to support the growing economically active population.
l The Gini coefficient for Cape Town consistently improved in the 10 years from 2001 to 2010: in 2010, it stood at 0.60; in 2007, it was at 0.59, and in 2010, it was 0.57 The Gini coefficient in 2011/12, however, had increased to 0.67, although this was still the lowest in South Africa.
l Cape Town’s growth performance tracks that of the country, especially in the last five years, with slightly faster growth of 3.7 percent compared to 3.2 percent.
This points to the greater resilience of Cape Town’s economy during the recession period.
l The local economy has moved steadily away from the productive sectors – agriculture and manufacturing – towards specialised services sectors – finance and business services, and transport and logistics. In general, the primary and secondary sectors decreased their combined share of GDP from 26 percent in 1996 to 22.3 percent in 2012, while the tertiary sector increased its share from 73.1 percent in 1996 to 77.7 percent in 2012.
The industries in which Cape Town has the most pronounced comparative advantage are fishing, clothing and textiles, wood product manufacturing, electronics, furniture, hospitality, finance and business services.
This reveals the city’s strengths and vulnerabilities. When consumer confidence is high and these industries are growing, the economy flourishes. However, when consumer confidence dips as a result of deteriorating domestic or international conditions, these industries slow down and weaken Cape Town’s economy in the process.
l Employment in Cape Town has grown steadily since 2005, when it was around 1.2 million, and peaked at 1.5 million in the fourth quarter of 2011. The average annual growth rate of employment between 2005 and 2013 was 2.4 percent, while the corresponding GDP growth rate was 3.7 percent.
On average in the period 2005-2013, employment growth was not sufficient to accommodate the growth in new entrants to the labour market.
As labour force growth exceeded employment growth, the strict unemployment rate in Cape Town increased from 19 percent to 25 percent between 2005 and 2013.
l The informal sector constitutes a smaller portion of total employment, with only 8.7 percent of jobs being located in the informal sector in the fourth quarter of 2013. This was 9.8 percent lower than in the previous quarter. Although more formal jobs may be available in Cape Town than in other regions of the country, the city’s high unemployment rate (compared to other emerging cities) means that the informal economy should be playing an important role as an employer in the local economy.
The challenge for Cape Town lies in the fact that although its labour market is more inclusive than South Africa’s, the city still has a high unemployment rate (especially among the youth), as well as a high proportion of people with relatively low skills in its labour force.
Cape Town needs growth in sectors with high absorption of low-skilled labour. The fastest-growing sectors in Cape Town’s economy, however, are more capital-intensive than labour-intensive and, for the most part, require workers who are highly skilled.