GDP decreases by 0.6%

Tuesday, December 3, 2019

The South African Gross Domestic Product (GDP) has decreased by 0.6% in the third quarter of 2019, Statistician-General Risenga Maluleke has revealed.

“The economy of the country went into a [0.6% slump] in the third quarter of 2019, while year-on-year it is sitting at 0.1% and 0.3% at nine-months-on-nine-months,” he said on Tuesday at a briefing.

The Statistics South Africa (Stats SA) report revealed that the community and social services sector accounted for 22.5% (23.9% share of nominal GDP) of the employment and GDP share per industry.

Community and social services, trade, finance, manufacturing and private households account for 20.8%, 15.2%, 10.7%, 8.2% and 7.9%, respectively, while transport accounts for 6%, agriculture 5.4% and mining 2.6%.

Addressing reporters, Maluleke revealed that the mining and quarrying industry decreased by 6.1% and contributed -0,5% of a percentage point to GDP growth.

“During this period, a decreased production was reported in the mining of platinum group metals (PGMs), coal and iron ore,” he said.

Releasing the figures, Maluleke said the manufacturing industry decreased by 3.9% and contributed -0,5% of a percentage point to GDP growth.

The divisions that made the largest contributions to the decrease were basic iron and steel, non-ferrous metal products, metal products and machinery; petroleum, chemical products, rubber and plastic products; and wood and wood products, paper, publishing and printing.

The report states that transport storage and the communication industry decreased by 5.4% and contributed -0,5% of a percentage point to GDP growth. Decreased economic activity was reported for land transport and transport support services.

“In contrast, the trade, catering and accommodation industry increased by 2.6% and contributed 0.4% of a percentage point to GDP growth, largely as a result of positive growth in wholesale trade. Finance, real estate and business services increased by 1.6% and contributed 0.3 of a percentage point to the GDP growth,” said Maluleke.

In quarter three, general government services increased by 2.4%, mainly attributed to increased employment in provincial government and higher education institutions.

“The unadjusted real GDP at market prices for the first nine months of 2019 increased by 0.3% compared with the first nine months of 2018,” Maluleke said.

Regarding expenditure on GDP, figures fell by 0.3% in the third quarter.

“Gross fixed capital formation increased by 4.5%. The main contributors to the increase were machinery and equipment, other assets and transport equipment. Strong imports of machinery and equipment supported the increase in gross fixed capital formation,” said Stats SA.

During this time, there was a R9.5 billion drawdown of inventories. Large decreases were reported for the manufacturing, trade and mining industries. –