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Statistics South Africa (Stats SA) announced on Tuesday that the country’s gross domestic product (GDP) grew by 0.4% in the first quarter of 2023.
Data show that the manufacturing and finance industries were major drivers of growth on the supply side of the economy.
“The demand side was lifted by exports, with smaller positive contributions for household, government and investment spending,” Stats SA said in a statement.
According to Stats SA, eight out of 10 industries recorded growth in the first three months of the year, with manufacturing and finance, real estate and business services the largest positive contributors.
Manufacturing output increased by 1.5%, adding 0.2 of a percentage point to GDP growth.
“The production of food and beverages was the main catalyst behind the industry’s positive showing,” the agency said.
Finance, real estate and business services crept up by 0.6%, while personal services increased by 0.8%, driven by growth in community services.
In addition, a rise in rail freight and rail passenger transport helped the transport, storage and communication industry expand by 1.1%.
“Air transport, transport support services and communications also witnessed stronger economic activity, contributing to the industry’s positive reading.”
Another highlight is positive turn in mining activity in the first quarter after a disappointing end to 2022. Mining and quarrying recorded an uptick of 0.9%, according to Stats SA.
The trade industry also registered upward growth, with positive results from wholesale trade, retail trade and catering, and accommodation.
“Motor trade wasn’t as lucky, however, recording a decrease in economic activity.”
The national statistical service said the electricity, gas, water and agriculture sectors contracted in the first quarter.
“Electricity, gas and water utilities registered its fourth consecutive quarter of decline (at -1.0%), dampened by weaker electricity production and lower water consumption.
“The decline in utilities in the first quarter was an improvement from the decrease recorded in the previous quarter.”
Agriculture slumped by 12.3% due to a decline in the production of field crops and animal products – the largest negative contributor, subtracting 0.4 of a percentage point from GDP growth.
Stats SA also measures the expenditure side of GDP, indicating total demand in the economy. This includes measures of government consumption, household consumption, investment and net exports.
“Mirroring the rise in construction on the economy’s supply side, gross fixed capital formation increased on the back of government investment.
“While the private sector and public corporations made smaller positive contributions, their impact was not on the same scale as government,” said Stats SA.
“Exports increased by 4.1% in Q1:2023. The rise was largely influenced by increased trade in metals; vegetable products; prepared foodstuffs, beverages & tobacco, and machinery & electrical equipment,” said Stats SA.
Meanwhile, households increased spending on restaurants and hotels by 6.9%.
“This budget item was the largest positive contributor to the 0.4% rise in overall household consumption expenditure,” Stats SA said.
Imports were also up in the first quarter, thanks to the increased trade in machinery and equipment, chemical products, vehicles and transport equipment, and prepared foodstuffs and beverages.
“After the sharp downturn in the second quarter of 2020, real GDP (constant 2015 prices) took two years to return to pre-pandemic levels.
“In the third quarter of 2022, real GDP reached an all-time high of R1 161 billion. Despite the 0.4% rise in the first quarter of 2023, GDP remains below this peak,” the agency said. – SAnews.gov.za
Source of original article: SAnews (www.sanews.gov.za).
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