South Africa is barely moving the dial

 ·15 Mar 2024

Two of South Africa’s most significant contributors to GDP – manufacturing and mining – have shown mixed results for the first month of the year – barely moving the dial on economic growth.

According to Stats SA, manufacturing production increased by 2.6% year-on-year in January 2024, while mining declined by 3.3%.

This comes off the back of quarterly GDP (ending December 2023) showing fractional growth of 0.1% – and 0.6% for the entire year.

In the manufacturing sector, the most significant contributors were:

  • petroleum, chemical products, rubber and plastic products (13.6% and contributing 2.9 percentage points);
  • wood and wood products, paper, publishing and printing (5.0% and contributing 0.5 of a percentage point);
  • Textiles, clothing, leather and footwear (6.6% and contributing 0.2 of a percentage point); and
  • Glass and non-metallic mineral products (5.2% and contributing 0.2 of a percentage point).

Seasonally adjusted manufacturing production increased by 0.8% from December to January, after month-on-month changes of 0.9% in November and -1.3% in December.

For the three months ended January 2024, seasonally adjusted manufacturing production increased by 0.2%.

Source: Stats SA

Mining production

On the other hand, mining production decreased by 3.3% year-on-year in January.

The largest negative contributors were:

  • Manganese ore (-27.1% and contributing -2.3 percentage points);

  • Gold (-12.7% and contributing -1.8 percentage points); and

  • Diamonds (-41.2% and contributing -1.7 percentage points).

Seasonally adjusted mining production decreased by 0.8% in January 2024, following month-on-month changes of 2.2% in November and -4,6% in December.

Looking slightly positively, adjusted mining production did increase by 0.1% in the three months ended January 2024, with the largest positive contributor being coal (3.9% and contributing 1.0 percentage point).

Mining data often provides growth clues for the South African economy, and the retraction is concerning for an economy that narrowly avoided a technical recession in Q4 2024 after posting a 0.1% quarter-on-quarter rise in GDP.

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