GDP shock for South Africa

South Africa’s gross domestic product (GDP) figures have come in below expectations, with the economy seeing a quarter-on-quarter decline.

Stats SA said that South Africa’s GDP decreased by 0.3% in Q3 2024, following an increase of 0.3% in the second quarter of 2024.

This is far below Investec and Nedbank’s prediction, which foresaw 0.5% quarter-on-quarter growth.

Stats SA said that the agriculture, forestry and fishing industry decreased by 28.8%, contributing -0.7 of a percentage point to the negative GDP growth.

This was mainly due to decreased economic activities reported for field crops.

The transport, storage and communication industry decreased by 1.6%, contributing -0.1 of a percentage point.

Decreased economic activities were seen for land transport and transport support services.

The trade, catering and accommodation industry also decreased by 0.4%. Decreased economic activities were reported for wholesale trade, motor trade, and food and beverages.

General government services also dropped by 0.1%, primarly due to decreased employment in national and provincial government and extra-budgetary institutions.

On the positive side, the finance, real estate and business services industry increased by 1.3%, adding 0,3 of a percentage point.

Stats SA said that increased economic activities were seen for financial intermediation, insurance and pension funding, auxiliary activities, real estate activities and other business services.

The personal services industry jumped by 0.5%, contributing 0.1 of a percentage point, with economic activities reported for health and education.

The manufacturing industry increased by 0.5%, adding 0.1 of a percentage point. Three of the ten manufacturing divisions saw positive growth rates.

The mining and quarrying industry increased by 1.2%, contributing 0.1 of a percentage point. Increased economic activities were seen for manganese and chromium ore.

Expenditure on GDP

Expenditure on real GDP dropped by 0.2% in Q3 following an increase of 0.4% in Q2 2024.

Household final consumption expenditure (HFCE) jumped by 0.5%, contributing 0.3 of a percentage point to the total negative growth.

The highest growth rates were seen for non-durable and semi-durable goods.   

The main positive contributors to the increase in HFCE were expenditures on food and non-alcoholic beverages (0.9% and contributing 0.1 of a percentage point), housing, water, electricity, gas and other fuels (0.6% and contributing 0.1 of a percentage point), recreation and culture (1.2% and contributing 0.1 of a percentage point) and restaurants and hotels (1.1% and contributing 0.1 of a percentage point).

Final consumption expenditure by the general government dropped by 0.5% and contributed -0.1 of a percentage point.

This was mainly due to decreases in purchases of goods and services and compensation of employees.

Gross fixed capital formation increased by 0.3%. The main positive contributors to the increase were other assets (4.4% and contributing 0.5 of a percentage point), construction works (1.4% and contributing 0.2 of a percentage point) and machinery and other equipment (0.5% and contributing 0.2 of a percentage point).

“There was a R6.6 billion drawdown of inventories (seasonally adjusted and annualised value). Large decreases in three industries, namely manufacturing; electricity, gas and water; and mining and quarrying, contributed to the inventory drawdown,” said Stats SA.

Stats SA said that exports contributed positively to expenditure on GDP.

“Exports of goods and services decreased by 3.7%, largely influenced by decreased trade in pearls, precious and semi-precious stones and precious metals; vehicles and transport equipment excluding large aircraft; chemical products; base metals and articles of base metals; and machinery and electrical equipment.”

“Imports of goods and services decreased by 3.9%, largely influenced by decreased trade-in vehicles and transport equipment excluding large aircraft; mineral products; vegetable products; and base metals and articles of base metals.”

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