Good news for SA’s economy: GDP increased by 0.4% in second quarter of 2024

South Africa’s GDP increased by 0.4% in the second quarter of 2024 after 0.0% growth in the first quarter of 2024. Economists also expected an uptick of 0.4%.

Statistics SA announced the gross domestic product (GDP) figures for the second quarter this morning.

The finance, real estate and business services industry increased by 1.3%, contributing 0.3 of a percentage point to the GDP growth, with increased economic activities reported for financial intermediation, auxiliary activities, real estate activities and other business services.

The trade, catering and accommodation industry increased by 1.2%, contributing 0.1 of a percentage point, with increased economic activities reported for wholesale trade, retail trade and accommodation.

ALSO READ: GDP for second quarter: economists expect uptick after contraction

The manufacturing industry increased by 1.1%, contributing 0.1 of a percentage point to GDP growth, with six of the ten manufacturing divisions reporting positive growth rates in the second quarter.

The divisions that made the largest positive contributions are motor vehicles, parts and accessories and other transport equipment, food and beverages, basic iron and steel, non-ferrous metal products, metal products and machinery.

The electricity, gas and water industry increased by 3.1%, contributing 0.1 of a percentage point to GDP growth, largely due to increases in electricity production and consumption, as well as water consumption.

Decrease for transport and agriculture

The transport, storage and communication industry decreased by 2.2%, contributing -0.2 of a percentage point, with a decrease in economic activities reported for land transport and transport support services.

The agriculture, forestry and fishing industries decreased by 2.1%, contributing -0.1 of a percentage point to GDP growth, mainly due to decreased economic activities reported for field crops and animal products.

ALSO READ: GDP contraction in first quarter opens door for economic recession

Increases in expenditure on GDP

According to Statistics SA, expenditure on real GDP increased by 0.5% in the second quarter of 2024, after it decreased by 0.1% in the first quarter of 2024.

Household final consumption expenditure (HFCE) increased by 1.4%, contributing 0.9 of a percentage point to the total growth. The highest growth rates were reported for services and semi-durable goods.

The main positive contributors to the increase in household final consumption expenditure were:

• spending on the ‘other’ category that increased by 4.5% and contributed 0.6 of a percentage point
• clothing and footwear that increased by 3.2% and contributed 0.2 of a percentage point and
• food and non-alcoholic beverages, that increased by (1.2% and contributed 0.2 of a percentage point.

General government’s final consumption expenditure increased by 1.0%, contributing 0.2 of a percentage point, mainly driven by increases in buying goods and services and paying employees.

Decreases in expenditure on GDP

Gross fixed capital formation decreased by 1.4%, contributing -0.2 of a percentage point. The main negative contributors to this decrease were other assets4 (-8.4% and contributing -0.9 of a percentage point), construction works (-3.7% and contributing -0.6 of a percentage point) and machinery and other equipment (-1.2% and contributing -0.5 of a percentage point).

Statistics SA says there was a R9.6 billion build-up of inventories (seasonally adjusted and annualised value). Large increases in three industries, namely trade, catering and accommodation, manufacturing and finance, real estate and business services, contributed to the inventory build-up.

ALSO READ: Stable supply of electricity and GNU will boost stronger rebound in economic growth

Less exports, more imports

Net exports contributed negatively to expenditure on GDP, with the exports of goods and services decreasing by 0.4%, largely influenced by decreased trade in:

• vegetable products
• mineral products
• vehicles and transport equipment excluding large aircraft and
• base metals and articles of base metals.

Imports of goods and services increased by 1.7%, largely influenced by increased trade in:

• vehicles and transport equipment excluding large aircraft
• vegetable products
• mineral products and
• textiles and textile articles.