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Blog: 29 September 2016 (GFCF)
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We take a look at South Africa's Gross Fixed Capital Formation (GFCF) from 2010 to 2015. GFCF is defined by the UN Statistics division as follows "Gross fixed capital formation, abbreviated as GFCF,consists of resident producers’ investments, deducting disposals, in fixed assets during a given period. It also includes certain additions to the value of non-produced assets realized by producers or institutional units. Fixed assets are tangible or intangible assets produced as outputs from production processes that are used repeatedly, or continuously, for more than one year."
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GFCF per Industry
The line chart below shows the total value of GFCF per industy from 2010 to 2015 (expressed in 2010 Constant prices). I.e the effect of inflation has been removed from the data.
The graphic above highlights clear trends for the various industries' GFCF over time, in addition to showing the scale of GFCF when compared to the other industries in the economy.
Construction:
The industry that has consistently had the lowest amount of GFCF is the construction industry. With their annual GFCF hanging around the R10billion mark from 2010 to 2015. So no real growth in capital formation taking place in the construction industry. (Agriculture which is the next biggest industry in terms of GFCF has almost double the amount of GFCF than the construction industry).
Agriculture:
Not far behind the construction industry is the Agriculture industry with the GFCF sitting at levels around R18billion in 2015, just more than half of the GFCF of the next biggest industry in terms of GFCF which is the Trade industry. With their GFCF in 2015 sitting at around R34billion.
Trade:
This industry's level of GFCF has remained relatively stable of the last couple of years, with no real declines or increases recorded over the period. Shows the industry is finding it tough going and are not willing to invest massive amounts into buying fixed assets at this point in time, and seems content to just keep with the current status quo.
Construction:
The industry that has consistently had the lowest amount of GFCF is the construction industry. With their annual GFCF hanging around the R10billion mark from 2010 to 2015. So no real growth in capital formation taking place in the construction industry. (Agriculture which is the next biggest industry in terms of GFCF has almost double the amount of GFCF than the construction industry).
Agriculture:
Not far behind the construction industry is the Agriculture industry with the GFCF sitting at levels around R18billion in 2015, just more than half of the GFCF of the next biggest industry in terms of GFCF which is the Trade industry. With their GFCF in 2015 sitting at around R34billion.
Trade:
This industry's level of GFCF has remained relatively stable of the last couple of years, with no real declines or increases recorded over the period. Shows the industry is finding it tough going and are not willing to invest massive amounts into buying fixed assets at this point in time, and seems content to just keep with the current status quo.
Finance, Reasl Estate and Business services:
Finance, Real Estate and Business services had the highest level of GFCF in 2010, but it has shown a gradual decline since 2010 to around 2014, and a slight rebound in 2015. Currently this industry has the 3rd highest level of GFCF, after being the biggest in 2010. Indicative of how tough the finance and real estate sector has found life in the last 5 years.
Finance, Real Estate and Business services had the highest level of GFCF in 2010, but it has shown a gradual decline since 2010 to around 2014, and a slight rebound in 2015. Currently this industry has the 3rd highest level of GFCF, after being the biggest in 2010. Indicative of how tough the finance and real estate sector has found life in the last 5 years.
Transport:
The Transport industry has shown solid growth in their value of GFCF from 2010 to 2015, while it was the 3rd biggest industry in terms of GFCF in 2010, it has now surpassed the Finance and Real Estate industry and is lying in 2nd place behind Community services which as mentioned earlier is largely made up by Government.
The Transport industry has shown solid growth in their value of GFCF from 2010 to 2015, while it was the 3rd biggest industry in terms of GFCF in 2010, it has now surpassed the Finance and Real Estate industry and is lying in 2nd place behind Community services which as mentioned earlier is largely made up by Government.
Electricity, Water and Gas:
One of the more contraversial industries (Electricity, Gas and Water) has seen significant increases in it's GFCF. This is largely due to ESKOM pumping massive amounts of money into new power plants and upgrading and restarting old and mothballed power stations to stave off loadshedding and the crippling effect an unstable power supply has on South Africa's economic growth and foreign direct investment (FDI), as investors do not want to undertake significant investments into South Africa if they cant be assured of a uninterrupted power supply
One of the more contraversial industries (Electricity, Gas and Water) has seen significant increases in it's GFCF. This is largely due to ESKOM pumping massive amounts of money into new power plants and upgrading and restarting old and mothballed power stations to stave off loadshedding and the crippling effect an unstable power supply has on South Africa's economic growth and foreign direct investment (FDI), as investors do not want to undertake significant investments into South Africa if they cant be assured of a uninterrupted power supply
Manufacturing:
Once the pride and joy of the South African economy, the manufacturing industry has seen a drop in its relative importance in the South African economy over time. For more details Click Here
This industry, similar to the Trade and Finance, Real Estate and Business services industry has found the going very tough in recent years and there has hardly been any growth in GFCF in the manufacturing industry from 2010 to 2015, with a slight spike in 2011 before hitting a downward trend since then.
Once the pride and joy of the South African economy, the manufacturing industry has seen a drop in its relative importance in the South African economy over time. For more details Click Here
This industry, similar to the Trade and Finance, Real Estate and Business services industry has found the going very tough in recent years and there has hardly been any growth in GFCF in the manufacturing industry from 2010 to 2015, with a slight spike in 2011 before hitting a downward trend since then.
Mining and Quarrying:
GFCF in this industry has seen very modest growth from 2010 to 2015 (4.11% from 2010 to 2015). No real surprise that there has not been massive growth in this industry's GFCF as commodity prices has plummeted due to lack luster demand. One suspects any GFCF taking place in this industry currently is just to keep the mines open and running at some cost effective/ efficient level while the industry rides out this tough time.
GFCF in this industry has seen very modest growth from 2010 to 2015 (4.11% from 2010 to 2015). No real surprise that there has not been massive growth in this industry's GFCF as commodity prices has plummeted due to lack luster demand. One suspects any GFCF taking place in this industry currently is just to keep the mines open and running at some cost effective/ efficient level while the industry rides out this tough time.
Community and Social services:
The night in shining armour for South Africa's GFCF is the Community and Social services industry. This industry includes all spheres of government. The strong increase in the GFCF of this industry clearly shows government's increased spending towards infrastruture projects. GFCF in this industry has increased by around 55% with it going up from R85billion in 2010 to R131billion by 2015.
The night in shining armour for South Africa's GFCF is the Community and Social services industry. This industry includes all spheres of government. The strong increase in the GFCF of this industry clearly shows government's increased spending towards infrastruture projects. GFCF in this industry has increased by around 55% with it going up from R85billion in 2010 to R131billion by 2015.
