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.
| Sector | Growth Rate | Contribution to GDP |
|---|---|---|
| Manufacturing | -1.4% | -0.2 percentage points |
| Motor Vehicles & Parts | Negative | Largest contributor |
| Basic Iron & Steel | Negative | Significant 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.
| Commodity | Growth Rate |
|---|---|
| Platinum Group Metals (PGMs) | Decreased |
| Coal | Decreased |
| Gold | Decreased |
| Manganese Ore | Decreased |
Construction Sector Performance
The construction industry faced a steep decline, decreasing by 3.1%. This contributed -0.1 percentage points to the GDP reduction.
| Sector | Growth Rate | Contribution to GDP |
|---|---|---|
| Construction | -3.1% | -0.1 percentage points |
| Residential Buildings | Decreased | Significant impact |
| Construction Works | Decreased | Notable 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.
| Sector | Growth Rate | Contribution to GDP |
|---|---|---|
| Agriculture, Forestry & Fishing | 13.5% | 0.3 percentage points |
| Horticulture Products | Increased | Major 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 Category | Growth Rate | Contribution to HFCE |
|---|---|---|
| Durable Goods | Decreased | Negative impact |
| Semi-Durable Goods | Decreased | Negative impact |
| Services | Decreased | Negative 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.
| Category | Growth Rate | Contribution 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 Category | Growth Rate |
|---|---|
| Pearls and Precious Metals | Decreased |
| Vehicles and Transport Equipment | Decreased |
| Chemical Products | Decreased |
| Base Metals and Articles | Decreased |
| Mineral Products | Decreased |
Imports of Goods and Services
Imports of goods and services fell by 5.1%, largely driven by decreased trade in several areas.
| Import Category | Growth Rate |
|---|---|
| Mineral Products | Decreased |
| Vehicles and Transport Equipment | Decreased |
| Vegetable Products | Decreased |
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.