“It grew by 3.1%, driven by increased electricity generation and water distribution. If we ignore the topsy-turvy economic environment caused by the pandemic in 2020, the 3.1% growth rate represents the sharpest increase since the third quarter of 2008.” <\/p>\n\n\n\n
The construction industry also grew after a year of decline, growing 0.5% in Q2. This was due to economic activity related to residential and non-residential buildings. Nevertheless, there was a slight slowdown in construction works.<\/p>\n\n\n\n
Notably, three industries contracted during Q2 2024. <\/p>\n\n\n\n
Transport, storage & communication were the worst negative contributors, declining by 2.2% and dragging GDP growth down by 0.2 of a percentage point. <\/p>\n\n\n\n
“Strike action and a fall in the freight volumes contributed to the industry\u2019s poor performance,” said Stats SA.<\/p>\n\n\n\n
Agriculture, forestry & fishing also faced several headwinds, such as lower-than-expected rainfall in many parts of South Africa, which affected maise and soya bean production), heavy rain in KZN, which affected sugar cane production, and foot-and-mouth disease, impacting sheep and pork production,).<\/p>\n\n\n\n
Mining also saw a second decline due to the decreased production of iron ore, coal, diamonds and gold.<\/p>\n\n\n
![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/09\/image-6.png\")
<\/a><\/figure><\/div>\n\n\nOn the expenditure side of the economy, rising consumer confidence led to 1.4% increase in consumption expenditure. <\/p>\n\n\n\n
Consumers upped their spending across most product categories, with the miscellaneous goods & services product group being the largest positive contributor, driven primarily by increased spending on insurance.<\/p>\n\n\n
<\/a><\/figure><\/div>\n\n\nRegarding trade, imports rose by 1.7% on the back of increased trade in vehicles and transport equipment (excluding large aircraft), vegetable products, mineral products, and textiles and textile articles.<\/p>\n\n\n\n
In the second quarter, inventories increased by R9.6 billion. <\/p>\n\n\n\n
“The supply of goods in the economy exceeded demand, prompting the trade, manufacturing, and finance industries to store newly produced goods,” said Stats SA. <\/p>\n\n\n\n
However, gross fixed capital formation, which includes investments in infrastructure and other fixed assets, disappointed for the fourth straight quarter. <\/p>\n\n\n\n
“The 1.4% decline in the second quarter was due to lower investments in computer software, biological assets, construction works, machinery & other equipment, and transport equipment.”<\/p>\n\n\n\n
Exports were also lower due to weaker trade in vegetable products, mineral products, vehicles & transport equipment (excluding large aircraft), and base metals & articles of base metals.<\/p>\n\n\n