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South Africa's Q1 GDP Dips 0.1% Amid Manufacturing, Mining Slumps | Rateweb
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South Africa’s Q1 GDP Dips 0.1% Amid Manufacturing, Mining Slumps

South Africa’s economy experienced a slight contraction in the first quarter of 2024. The GDP fell by 0.1%, according to the latest data.

Manufacturing Sector Hit Hard

The manufacturing industry saw a significant decline of 1.4% in Q1. This sector’s downturn contributed -0.2 percentage points to the overall GDP reduction.

Key Contributors to Manufacturing Decline

Five of the ten manufacturing divisions reported negative growth rates. The motor vehicles, parts, and accessories division led this decline.

SectorGrowth RateContribution to GDP
Manufacturing-1.4%-0.2 percentage points
Motor Vehicles & PartsNegativeLargest contributor
Basic Iron & SteelNegativeSignificant impact

Mining and Quarrying Industry

The mining and quarrying sector also decreased, dropping by 2.3% in Q1. This decrease contributed -0.1 percentage points to GDP.

Detailed Mining Industry Breakdown

The drop in mining was driven by reduced activities in several areas.

CommodityGrowth Rate
Platinum Group Metals (PGMs)Decreased
CoalDecreased
GoldDecreased
Manganese OreDecreased

Construction Sector Performance

The construction industry faced a steep decline, decreasing by 3.1%. This contributed -0.1 percentage points to the GDP reduction.

SectorGrowth RateContribution to GDP
Construction-3.1%-0.1 percentage points
Residential BuildingsDecreasedSignificant impact
Construction WorksDecreasedNotable contributor

Agriculture, Forestry, and Fishing Industry

In contrast, the agriculture, forestry, and fishing industry saw a significant increase of 13.5% in Q1. This sector contributed 0.3 percentage points to the GDP.

SectorGrowth RateContribution to GDP
Agriculture, Forestry & Fishing13.5%0.3 percentage points
Horticulture ProductsIncreasedMajor driver

Expenditure on GDP

Expenditure on real GDP decreased by 0.2% in the first quarter of 2024. This followed a 0.3% increase in the previous quarter.

Household Final Consumption Expenditure

Household final consumption expenditure (HFCE) decreased by 0.3%, contributing -0.2 percentage points to the total negative growth.

Expenditure CategoryGrowth RateContribution to HFCE
Durable GoodsDecreasedNegative impact
Semi-Durable GoodsDecreasedNegative impact
ServicesDecreasedNegative impact
Clothing and Footwear-7.0%-0.4 percentage points
Transport-1.3%-0.2 percentage points
Other-1.3%-0.2 percentage points

Government Consumption Expenditure

Final consumption expenditure by the general government decreased by 0.3%, contributing -0.1 percentage points. This decline was driven by reduced purchases of goods and services.

Gross Fixed Capital Formation

Total gross fixed capital formation fell by 1.8% in Q1 2024. This decrease contributed -0.3 percentage points to the GDP decline.

CategoryGrowth RateContribution to GFCF
Machinery and Equipment-1.4%-0.6 percentage points
Residential Buildings-4.3%-0.5 percentage points
Construction Works-2.5%-0.4 percentage points

Inventory Changes

There was a R5.5 billion drawdown of inventories in Q1 2024. Manufacturing, mining and quarrying, and personal services saw the largest decreases.

Net Exports

Net exports contributed positively to GDP expenditure in Q1 2024. Exports of goods and services decreased by 2.3%, influenced by decreased trade in several key sectors.

Export CategoryGrowth Rate
Pearls and Precious MetalsDecreased
Vehicles and Transport EquipmentDecreased
Chemical ProductsDecreased
Base Metals and ArticlesDecreased
Mineral ProductsDecreased

Imports of Goods and Services

Imports of goods and services fell by 5.1%, largely driven by decreased trade in several areas.

Import CategoryGrowth Rate
Mineral ProductsDecreased
Vehicles and Transport EquipmentDecreased
Vegetable ProductsDecreased

Conclusion

South Africa’s GDP faced a marginal decline in Q1 2024. Key sectors like manufacturing, mining, and construction contributed significantly to this downturn. However, the agriculture sector’s robust performance provided some offset. Economic challenges persist, indicating a need for strategic interventions to stimulate growth.