SA economy grew by 1,2% in second quarter

South Africa’s GDP increased by 1,2% in the second quarter of this year, thanks largely to the transport, storage and communication industry, which increased by 6,9% in the second quarter and made the largest contribution to GDP growth, namely 0,5 percentage points.

Statistics SA on Tuesday released the latest gross domestic product (GDP) statistics that also shows that unadjusted real GDP for the first six months of 2021 increased by 7,5% compared to the first six months of 2020.

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Positive growth

The increase in GDP was fueled by increased economic activity for land transport and communication services, as well as a 2,5% increase in the personal services industry, that contributed 0,4 of a percentage point to GDP growth, with increases for community services and other producers.

The personal services industry was followed by the trade, catering and accommodation industry, which increased by 2,2% and contributed 0,3 of a percentage point to GDP growth, with increased economic activity in wholesale, retail and motor trade, as well as increased spending on catering and accommodation.

The increase of 6,2% in the agriculture, forestry and fishing industry contributed 0,2 of a percentage point to GDP growth, with the increase mainly due to increased production of field crops, horticulture and animal products.

Mining and quarrying increased by 1,9%, contributing 0,1 of a percentage point to GDP growth, with increased production for platinum group metals (PGMs), gold and coal.

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Expenditure on GDP

According to Statistics SA, expenditure on real GDP increased by 1,2% in the second quarter of 2021. Other significant positive expenditure in household final consumption expenditure (HFCE) for the second quarter was noted in:

• household final consumption expenditure that increased by 0,5%, contributing 0,3 of a percentage point, with the highest growth rates and largest contributors in durable and non-durable goods
• expenditure on transport that increased by 2,7% and contributed 0,4 of a percentage point
• health increased by 2,5% and contributed 0,2 of a percentage point
• food and non-alcoholic beverages increased by 1,7% and contributed 0,2 of a percentage point
• restaurants increased by 2,4% and contributed 0,1 of a percentage point
• communication increased by 1,6% and contributed 0,1 of a percentage point
• clothing and footwear increased by 1,1% and contributed 0,1 of a percentage point.

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Negative growth

However, a negative contribution to growth in HFCE was reported for expenditure in the ‘other’ category, which decreased by 3,8% and contributed -0,5 of a percentage point, primarily due to lower spending on insurance services in the second quarter.

General government also spent 0,1% less, with decreases in employee compensation and spending on goods and services.

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Capital formation

Gross fixed capital formation increased by 0,9% with these main contributors:

• machinery and equipment that increased by 1,8% and contributed 0,7 of a percentage point
• ‘other’ assets increased by 6,4% and contributed 0,7 of a percentage point
• transport equipment increased by 1,1% and contributed 0,1 of a percentage point.

Stats SA also reported a R21,7 billion drawdown of inventories in the second quarter, with large decreases in electricity and mining contributing.

Exports and imports

Net exports was also a positive contributor to growth in expenditure on GDP, with the export of goods and services increasing by 4,0%, largely thanks to increased trade in mineral products, pearls, precious and semi-precious stones, precious metals and vehicles and other transport equipment.

Imports also increased by 0,4%, largely driven by increases in the import of mineral products, base metals and articles of base metals, as well as animal and vegetable fats and oils.