Download CAASA Economic Spotlight June 2015

CAASA
ECONOMIC
SPOTLIGHT
June 2015
SLIP
Economic impact of AAD 2014 achieves new record
The return since 2012 of the bi-annual Africa Aerospace & Defence (AAD) Exhibition to
Waterkloof Air Force Base (from Ysterplaat in Cape Town) has proven to be a boon for both
the Tshwane economy and South African Revenue Services (SARS).
An economic impact assessment of AAD 2014 conducted by the author on behalf of the AAD
Organisers’ Office shows a further expansion of the fairly sharp increase in macro-economic
benefits that accompanied the 2012 Exhibition.
Under the auspices of a
long-standing partnership
between the South African
Aerospace, Maritime and
Defence Industries
Association, the
Armaments Corporation of
South Africa, the CAASA
Trust and the Department
of Defence, the AAD
Exhibition has evolved
into an event that is widely
regarded as a national
asset.
AAD attracts decisionmakers in the aerospace
industry from all over the
globe and aviation
enthusiasts from every
Province in the country.
The key objective of the study was to determine the impact that the AAD 2014 Exhibition had
on the South African macro-economy and the economy of Tshwane. This involved the impact
on key economic indicators such as final demand (emanating from private consumption
expenditure, government expenditure, capital formation and exports), total output in the
economy, employment creation (formal – in terms of different skills levels & informal) and
taxation revenues (mainly personal income tax, value added tax and corporate tax).
As was the case in the impact assessment conducted for the 2012 Exhibition, the
expenditures of foreign visitors constituted the single most important category of value added
to the economy. It should be noted that the total of 2,170 foreign visitors is based on
verifiable, registered attendees and excludes visitors that did not attend as official guests of
the host organisations. It should therefore be regarded as a conservative estimate.
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Summary of macro-economic impact of AAD 2014
GDP effect - international visitors
GDP effect - domestic visitors
GDP effect – Organisers’ Office
GDP effect - other
Taxation revenue raised
Jobs created
Number of exhibitor countries
Countries as visitors
Advertising value equivalent of media exposure
Public day tickets
R 227m
R 273m
R 137m
R 154m
R 309m
5,000
29
86
R 19m
74,000
The table summarises the key quantifiable impacts of AAD 2014 on the economy, which
serves to justify the huge effort of the Exhibition’s partner organisations in arranging an event
of such stature. It also serves to enhance the lobbying power of the Organisers’ Office in
securing greater assistance from the Tshwane local government and Waterkloof Air Force
Base in upgrading some of the facilities for the 2016 event.
Aviation supply chain
Aviation makes a significant contribution to the South African economy, particularly via a
multi-dimensional supply chain.
This includes activities
and occupations involved
in the importation and
financing of aircraft;
general operations linked
to the movement of
people and freight; and
industry-specific
operations including such
diverse activities as
geological surveys, crop
spraying, eco- and
adventure- tourism, and
wildlife management.
Emergency operations
such as medical rescue,
fire fighting and policing
also have significant need
for aviation services.
In addition to determining the effect of AAD on GDP, employment and taxation revenues
flowing from the expenditures of visitors; the costs of stands & chalets; catering; and other
demand factors generated by the event, a number of ancillary effects also exert a positive
impact on the economy.
These include substantial media exposure, with an advertising value equivalent of more than
double the 2012 figure, as well as business subsequently procured as a result of exhibiting
products and services at the Exhibition. Finally, the AAD event undoubtedly enhances South
Africa’s reputation as a country that is capable of hosting mega-events, with substantial longterm positive effects on the economy, in general and tourism, in particular.
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