Image: iStock
South Africans heaved a sigh of relief on Tuesday as Statistics SA announced that the country’s gross domestic product (GDP) grew by 0.4% during the first quarter of the year compared to the previous quarter. This means that the country is not in a recession.
This was in line with the expectations of most economists.
The economy grew by 0.2% compared to the first quarter of 2022.
Eight industries – manufacturing; transport, storage and communication; construction; mining and quarrying; personal services; trade, catering and accommodation; finance, real estate and business services; and general government services – recorded growth in the first quarter.
Two industries – electricity, gas and water; and agriculture, forestry and fishing – recorded negative growth.
ALSO READ: Recession or not? SA’s economic growth to be revealed
The primary sector contracted by 4.7% in the first quarter, dragged down by the agriculture sector that showed a decline of 12.3% due to a decline in output for field crops and animal products. Mining, on the other hand, grew by 0.9%, with increased economic activities reported for the platinum group of metals and gold.
The secondary sector grew by 1.1%, pulled up by manufacturing (1.5%) and construction (1.1%), despite load shedding curtailing operations in manufacturing. The food and beverages division made the biggest positive contribution, while electricity, gas and water dragged economic activity lower due to decreases in consumption of electricity and water.
Construction did better thanks to increased economic activity related to construction works and non-residential as well as residential buildings.
In the tertiary sector, that grew by 0.7%, the transport, storage and communication industry recorded the highest growth rate, growing by 1.1%. Increased economic activities were reported for land and air transport, as well as transport support communication services.
ALSO READ: Rubbing shoulders with Russia could be catastrophic for SA’s economy
Trade also increased by 0.7% with increased economic activities reported for wholesale and retail trade, as well as catering and accommodation, while finance, real estate and business services grew by 0.6% thanks to increased economic activities reported for financial intermediation, insurance and pension funding, real estate and business services.
Government services grew by 0.2% due to an increase in employment numbers in the civil service, while personal services grew by 0.8% as increased economic activity was reported for community services.
Finance, real estate and business services was the largest industry in the economy in the first quarter of 2023, with a total of R1,482 trillion.
Expenditure on real GDP increased by 0.4% in the first quarter of 2023. Household final consumption expenditure increased by 0.4% in the first quarter, with increases reported for semi-durable and non-durable goods.
The main positive contributors to this increase were expenditures on restaurants and hotels (6.9%), health (2.6%), food and non-alcoholic beverages (1.0%), transport (0.9%) and clothing and footwear (2.3%). Expenditure on the ‘other’ category contributed negatively.
ALSO READ: Load shedding, Transnet cut 2023 SA growth outlook – Absa
Final consumption expenditure by general government increased by 1.2% in the first quarter, mainly driven by increases in goods and services and employee compensation.
Total gross fixed capital formation increased by 1.4% in the first quarter, with the main positive contributors other assets (10.3%), machinery and other equipment (1.3%), non-residential buildings (4.6%) and residential buildings (1.5%).
The first quarter saw a R35 billion build-up of inventories with large increases in three industries, namely mining and quarrying; trade, catering and accommodation; and personal services, contributing to the inventory build-up.
Net exports contributed negatively to growth in expenditure on GDP, while exports of goods and services increased by 4.1%, largely thanks to increased trade in base metals and articles of base metals, vegetable products, prepared food, beverages and tobacco and machinery and electrical equipment.
Imports of goods and services increased by 4.4%, largely thanks to increased trade in machinery and equipment, chemical products, vehicles and transport equipment and prepared food, beverages and tobacco.
Download our app and read this and other great stories on the move. Available for Android and iOS.
