South Africa’s economy grew by 1.1% in the first quarter of this year, or at an annualised growth rate of 4.6%, said Statistics SA on Tuesday.
According to the Statistician-General Risenga Maluleke, the growth in GDP figures a revised 1.4% – an annualised rate of 5.8% rise in real gross GDP in the fourth quarter of last year.
Maluleke said finance, mining and trade industries were the main drivers of growth on the production side of the economy, while household spending and changes in inventories helped push growth on the expenditure side.
However, the Maluleke said despite this being the third consecutive quarter of positive growth, the South African economy was 2.7% smaller than it was in the first quarter of last year.
The Stats SA GDP report shows that eight of the ten industries recorded positive gains in the first quarter of this year, with finance, mining and trade making the most significant contributions.
“Economic activity in the finance, real estate and business services industry increased at an annualised rate of 7.4%. This was mostly driven by property services which recorded a rise in mortgage advances and bond registrations and the banking sector, registering a rise in the number of credit extensions,” said Maluleke.
He added: “The mining industry also had a positive quarter with annualised growth of 18.1%, boosted by the production of platinum group metals, iron ore, gold and chromium. But on the downside, miners in manganese ore, coal and diamonds recorded lower production figures in the first quarter.”
Michael Manamela, Stats SA chief director of national accounts, said the country also experienced strong wholesale and retail activity which was underpinned growth in the trade industry.
Manamela said wholesalers recorded increases in sales of petroleum, as well as in consumer electronics. “Most notable of consumer electronics are digital appliances and high-end televisions. Retailers also enjoyed a positive quarter, led by increases in sales of grocery products, healthcare services, vitamins and drugs,” he said.
The GDP figures also show that manufacturing output increased at an annualised rate of 1.6%. Manamela said this was mostly driven by strong growth in the production of motor vehicles, parts and accessories and other transport equipment.
Manufactures in wood, paper and printing made a notable contribution too, supported by strong demand for packing materials and increased newspaper sales, he said.
Stats SA also measures the expenditure side of GDP. This provides an indication of total demand in the economy.
Expenditure side of GDP includes measures of household spending, government spending, investment spending – gross fixed capital formation and changes in inventories – as well at net exports.
According to the report, household final consumption expenditure increased at an annualised rate of 4.7% in the first quarter. This was largely driven by miscellaneous goods and services, clothing and footwear, as well as furnishings, household equipment and maintenance.
Maluleke said notable items in the “miscellaneous goods and services” category that recorded growth include insurance-related products, as well as retail goods such as electrical appliances, jewellery and other personal effects.
“Clothing and footwear expenditure increased at an annualised rate of 22.2%. Changes in inventories, particularly in the mining and trade industries, also spurred growth on the expenditure side of the economy,” he said.
However, Maluleke warned that load shedding remains a great concern.
Joe de Beer, deputy director-general for economics statistics at Stats SA, said load shedding and a decline in water supply contributed to the contraction in the electricity, gas and water supply industry.
He said the agriculture, forestry and fishing industry performed poorly in the first quarter in comparison with the previous quarter, “dragged lower by weaker production figures for field crops and animal products”.
“The agriculture, forestry and fishing industry decreased at a rate of 3.2% and only contributed 0.1 of a percentage point to GDP growth,” De Beer said.
The economy was severely impacted by the Covid-19 pandemic and the subsequent lockdown restrictions.
Real GDP was R782 billion in the first quarter of last year and, in the second quarter of last year, when the lockdown restrictions were at their most stringent, economic output fell sharply to R652 billion.
Maluleke said economic activity had increased since then. “This was in line with easing the lockdown restrictions, with real GDP rising to R761 billion in the first quarter of this year. This level is roughly comparable to what the economy was producing in the first quarter of 2016, even though it is 2.7% down from the R782 billion recorded in the first quarter of last year,” said Maluleke.