Nicola Mawson
South Africa’s gross domestic product (GDP) increased by 0.4% in the second quarter of 2024, following no growth in the first quarter of 2024.
The first quarter’s figure has been revised from an initial print of a decline of 0.1%.
In a statement, Statistics SA said the electricity, gas and water industry increased by 3.1%, contributing 0.1 of a percentage point.
This was largely due to increases in electricity production and consumption, as well as water consumption.
The biggest contributor to higher GDP was the finance, real estate and business services industry, increased by 1.3%, contributing 0.3 of a percentage point to the GDP growth.
“Increased economic activities were reported for financial intermediation, auxiliary activities, real estate activities and other business services.”
Another contributor to the gain was the trade, catering and accommodation industry, which grew 1.2%, contributing 0.1 of a percentage point. Increased economic activities were reported for wholesale trade, retail trade and accommodation.
On a positive note, the manufacturing industry’s growth increased by 1.1%, contributing 0.1 of a percentage point. Six of the ten manufacturing divisions reported positive growth rates in the second quarter.
However, the transport, storage and communication industry decreased by 2.2%, contributing -0,2 of a percentage point. Decreased economic activities were reported for land transport and transport support services, it said.
In addition, the agriculture, forestry and fishing industry declined, dropping growth by 2,1% and negatively affecting GDP by -0,1 of a percentage point. “This was primarily due to decreased economic activities reported for field crops and animal products,” Statistics SA said.
On Monday, Investec said in a note that it had expected a gain quarter-on-quarter to 0.5%.
Statistics SA’s initial GDP data for the first three months of the year to March showed that growth dropped 0.1% quarter-on-quarter, following a 0.3% increase in the fourth quarter of 2023. This was on the back of five of the 10 manufacturing divisions reporting negative growth rates in the first quarter.
The motor vehicles, parts and accessories and other transport equipment division, as well as the basic iron and steel, non-ferrous metal products, metal products and machinery division made the largest negative contributions to the decrease in the first quarter. The mining and quarrying industry decreased by 2.3% in the first quarter, contributing -0.1 of a percentage point.
Towards the end of last month, Absa revised its 2024 and 2025 growth forecasts for the economy thanks to a lack of loadshedding, lower consumer inflation – which is at 4.6% and has led to more optimism that interest rates will come down – as well as the apparent support for structural reforms in the ports and rail sector by the Government of National Unity (GNU).
BUSINESS REPORT