South Africa’s economy grew by 0.6% in the second quarter of the year.
This follows the 0.4% rise in GDP recorded in the first quarter.
According to Statistics South Africa’s (StatsSA) latest figures, six industry sectors grew on the supply side in the second quarter – with manufacturing and finance particularly providing upward momentum. In terms of the demand for products, the country has benefited from a sharp increase in investments in machinery and equipment that includes products related to renewable energy.
Six of the ten industry sectors showed an increase in economic activity in the second quarter: agriculture, forestry and fisheries, manufacturing, mining, personal services, finance and government services.
After two consecutive negative quarters, agriculture took a positive course. The 4.2% increase in output was driven by increases in the production of field and horticultural crops. Favorable weather conditions, increased cultivation and an increase in the demand for exports provided further impetus to the sector.
The mining industry also performed relatively well, with a second consecutive quarter of growth behind it. The personal services industry has grown thanks to higher growth in education and health, while the increase in general government services is mainly attributed to an increase in staff numbers, says StatsSA.
However, not all industry sectors experienced a positive second quarter. After 18 months of sustained growth, the transport, storage and communications sector’s revenue shrank by 1.9%. Transport services were sluggish and there was a decline in road transport and road passenger transport.
Trade figures also fell due to weaker retail and wholesale figures. The overall decline was offset by increased activity in the vehicle trade, tourism accommodation and restaurants, catering and the fast food industry.
The construction industry is one of the sectors that has lost steam.
Households have less money, but…
Household spending declined in the second quarter as consumers tried to cut back on all kinds of goods and services. Despite the overall decline, household spending on restaurants and hotels increased and the sector grew for a seventh consecutive quarter.