Stats SA Says GDP Has Improved In The 3rd Quarter, As The Economy Opens Up.


By Phumzile Mavimbela

 The Department of Statistics South Africa have released the results of the gross domestic product (GDP) for the third quarter of 2020. The report reveals  that  South Africa's economy grew by an annualised rate of 66.1% in the third quarter  or 13.5% year on year.  All industries have displayed an increase in economic activity compared to how they performed in  the second quarter. The  manufacturing, trade and mining industries have been the  biggest game changers in the third quarter.

 The manufacturing industry increased at a rate of 210,2% in the third quarter, contributing 16,2 percentage points to GDP growth. All ten manufacturing divisions reported positive growth rates in the third quarter. The four divisions with the largest contributions to the increase were basic iron and steel, non-ferrous metal products, metal products and machinery; petroleum, chemical products, rubber and plastic products; transport equipment; and food and beverages.

The mining and quarrying industry increased at a rate of 288,3%, contributing 11,8 percentage points to GDP growth. In the third quarter the industry recovered largely on account of the easing of local and global lockdown restrictions. Higher production was mainly due to increased activities in the production of platinum group metals (PGMs), iron ore, gold, manganese ore and diamonds. The trade, catering and accommodation industry increased at a rate of 137,0%.

Finance, real estate and business services have also recorded an  increased  rate of 16,5% in the third quarter. Increased economic activity was reported for financial intermediation, insurance and pension funding and other business services. The construction industry increased by 71,1% in the third quarter. Increased production was reported for residential buildings, non-residential buildings and construction works.

 
 

The GDP estimates are preliminary and may be revised. 2 Expenditure on GDP2 Expenditure on real gross domestic product increased at an annualised rate of 67,6% in the third quarter of 2020, as household consumption, exports and gross fixed capital formation recovered. Household final consumption expenditure increased at a rate of 69,5% in the third quarter, contributing 43,8 percentage points to total growth.

Stats SA says  the highest recovery rates were seen in durables and semidurables, but the largest contributor to growth was non-durables (which accounts for over a third of HFCE on goods and services). The main positive contributors to growth in HFCE were expenditures on transport (173,6% and contributing 17,2 percentage points), alcoholic beverages, tobacco and narcotics (673,4% and contributing 9,5 percentage points), food and non-alcoholic beverages (39,4% and contributing 9,1 percentage points), clothing and footwear (417,0% and contributing 9,0 percentage points), recreation and culture (410,3% and contributing 8,2 percentage points), and furniture, equipment and maintenance (102,0% and contributing 7,8 percentage points). Final consumption expenditure by general government increased at a rate of 0,7% in the third quarter. Increases in employment and spending on goods and services were reported in the third quarter. Gross fixed capital formation increased at a rate of 26,5%. 

The main contributors to the increase were construction works, residential buildings, non-residential buildings and machinery and other equipment3 . There was a R156,2 billion (annualised) drawdown of inventories in the third quarter of 2020. Large decreases in trade and mining contributed to the inventory drawdowns experienced in the third quarter of 2020. Net exports contributed positively to growth in expenditure on GDP in the third quarter. Exports of goods and services increased at a rate of 201,4%, largely influenced by increased trade in vehicles and other transport equipment; precious metals and stones; machinery and equipment; mineral products; and base metals. Imports of goods and services decreased at a rate of 1,6%, driven largely by decreases in textiles.

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Stats SA

South African Economy

GDP 3rd Quarter of 2020

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