South Africa’s GDP shrinks in first quarter

South Africa’s gross domestic product (GDP) decreased by 0.1% in the first quarter of 2024 as several key industries recorded poor performances in the first three months of the year.

StatsSA released South Africa’s GDP data today, which revealed that the country’s economy shrunk in the first quarter of 2024 after growing a marginal 0.1% in the fourth quarter of 2023.

According to StatsSA, three industries recorded negative growth in Q1.

The manufacturing industry decreased by 1.4% in Q1, contributing -0.2 of a percentage point to the negative GDP growth.

Five of the ten manufacturing divisions reported negative growth rates in the first quarter.

The motor vehicles, parts and accessories and other transport equipment division and the basic iron and steel, non-ferrous metal products, metal products and machinery division made the largest negative contributions to the decrease in the first quarter.

The mining and quarrying industry decreased by 2.3% in Q1, contributing -0.1 of a percentage point to the overall decline. Decreased economic activities were reported for platinum group metals (PGMs), coal, gold and manganese ore.

The construction industry decreased by 3.1% in the first quarter, contributing -0.1 of a percentage point. Decreases were reported for residential buildings and construction works.

The electricity, gas, and water industry decreased by 0.4%, transport, storage, and communication decreased by 0.5%, and general government services decreased by 0.1%.

The agriculture, forestry and fishing industry saw the largest increase of 13.5% in the first quarter of 2024, contributing 0,3 of a percentage point. This was primarily due to increased economic activities reported for horticulture products.

Trade, catering and accommodation, finance, real estate and business services, and personal services did marginally better, with a 0.1% increase each.

Expenditure on real GDP also decreased by 0.2% in Q1 of 2024.

Expenditure on real gross domestic product decreased by 0.2% in the first quarter of 2024, following an increase of 0.3% in the fourth quarter of 2023.

Household final consumption expenditure decreased by 0.3% in the first quarter of 2024, contributing -0.2 of a percentage point to the total negative growth. Decreases were reported for durable goods, semi-durable goods, and services.

The main negative contributors to the decrease in HFCE were expenditures on clothing and footwear (-7.0 and contributing -0.4 of a percentage point), transport (-1.3% and contributing -0.2 of a percentage point), and the ‘other’ category (-1.3% and contributing -0.2 of a percentage point).

Final consumption expenditures by the general government decreased by 0.3% in the first quarter, mainly due to decreases in purchases of goods and services and compensation of employees.

Total gross fixed capital formation decreased by 1.8%. The main negative contributors to the decrease were machinery and other equipment (-1.4%), residential buildings (-4.3%) and construction works (-2.5%).

In the first quarter of 2024, inventories were drained by R5.5 billion. Large decreases in three industries, manufacturing, mining and quarrying, and personal services, contributed to the inventory drawdown.

Net exports contributed positively to expenditure on GDP in the first quarter.

Exports of goods and services decreased by 2.3%, largely influenced by decreased trade in pearls, precious and semi-precious stones and precious metals; vehicles and transport equipment excluding aircraft; chemical products; base metals and articles of base metals; and mineral products.

Imports of goods and services decreased by 5.1%, largely influenced by decreased trade in mineral products, vehicles and transport equipment, excluding aircraft and vegetable products.