The Eastern Cape Barometer (ECB) for June 2008 slipped by 1.9% from 160 to 156 index points compared to the same month last year, showing that the province was also feeling the strain of higher interest rates and a general decline in economic activity.

The slowdown remains slower than Gauteng and the Western Cape, which are also measured by similar indices, said renowned economist Mike Schüssler, who compiles the barometer.

"The barometer's decline in June flows mainly from a rise of 4.7% in the Economic Stress Index, suggesting that the overall business climate is steadily worsening," said Schüssler.

The ECB Growth Index had, however, yielded a positive number of 2.7% which suggested that economic activity was still increasing, albeit at a slower rate than any month during the past five years.

The corresponding index in Gauteng and the Western Cape was already in negative territory, showing that these provinces had experienced more economic pain.

On a sectoral basis, the construction industry remained exceptionally strong. This was mainly due to enormous increases in the buildings reported as completed by municipalities and measured in square metres (16.3% from a year ago), and cement sales within the province growing at 21.5%.

"These indicators surely display a very robust construction industry within the Eastern Cape," Schüssler said.

The first ever ECB, launched in June, revealed that the province had experienced an average growth rate of 11.1% since 2003.

In 2004 alone, the province's private sector expanded by a massive 23% - mainly due to capital investment in Coega - but pulled back in 2007 to grow by only 2%.

During the first four months of this year the average growth was a mere 2.5%.

The barometer is a coincident index which is compiled from 89 sets of economic data in various private sector economic sectors and is compiled in partnership with the Eastern Cape Socio Economic Consultative Council.