SA’s third quarter growth slower than expected

06 December 2016 - 12:29 By ASHA SPECKMAN
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South African rand notes in a file photo.
South African rand notes in a file photo.
Image: REUTERS/Siphiwe Sibeko

SA’s economy grew at a slower pace than expected in the third quarter — by a seasonally adjusted and annualised 0.2% — after a 3.3% acceleration in the second quarter.

Markets had expected growth of between 0.3% and 0.6% during the third quarter compared to the second quarter. GDP contracted by 1.2% during the first quarter.

Mining and quarrying‚ finance‚ real estate and business services and general government services were the main contributors to gross domestic product (GDP)‚ data published by Statistics SA on Tuesday showed.

Mining and quarrying grew by 5.1% largely due to higher production in the mining of iron ore.

Manufacturing was among four industries that contracted during the third quarter. Manufacturing contracted by 3.2%‚ forestry and fishing lost 0.3%‚ electricity‚ gas and water fell by 2.9%‚ and trade‚ catering and accommodation declined by 2.1%. Agriculture‚ forestry and fishing has been in decline for seven consecutive quarters.

Joe de Beer‚ deputy director-general of economic statistics at Stats SA said: “Its mostly still the drought conditions‚ we are however seeing the 2016 drought is not bad in all aspects as it was in 2015.”

On the expenditure side‚ spending on GDP grew 0.5% during the third quarter compared to the growth in 3.4% in the second quarter. Spending by households and government increased but gross fixed capital formation - mainly a proxy of spending by the private sector - fell by 1% in the third quarter. The main reason for the decline were falls in spending on transport equipment.

Net exports contributed negatively to total spending on GDP‚ data showed. Exports fell by 26.4% due to lower exports of precious metals and transport equipment. Imports fell by 4.9% because of lower imports of machinery and electrical equipment.

There was a R20-billion build-up of inventories in the third quarter following a R28-billion drawdown in the second quarter. The build-up contributed 6.3 percentage points to total growth.

– TMG Digital/BusinessLIVE

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