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South Africa's GDP page:
Last updated (5 June 2018) |
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This page's sole purpose is to provide readers with interactive charts and graphics regarding South Africa's GDP (economic growth). The page will be updated on a adhoc basis as more quarter's data is released by Statistics South Africa (Stats SA).
In South Africa GDP is measured by two methods. Production method (the official GDP figure) and the expenditure method. The one measures the total value added of all goods and services produced (production method), while the other measures GDP via total spending that has taken place in the economy (expenditure method). |
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5 June 2018: Q1:2018 GDP growth sits at -2.2%
In today's update we take a look at South Africa's economic growth figures as published by Statistics South Africa, today at 11:30, for the first quarter of 2018 (Q1:2018). Major growth in South Africa's economy in recent quarters have been fueled by strong growth in the agricultural sector (recovering from severe droughts). However the other industries have shown little to no growth in 2017. The graphic below provides the growth rates per industry for Q1:2018
The quarter on quarter annualised growth rates (fancy speak for assuming growth in the industry from Q1:2018 over Q4:2017 continued for a full year) for the various sectors of South Africa is summarised below:
- Agriculture/forestry and fishing: -24.2%
- Mining: -9.9%
- Manufacturing: -6.4%
- Electricity/water and gas supply: -0.5%
- Construction: -1.9%
- Trade (wholesale, retail and motor trade): -3.1%
- Transport: 0.9%
- Finance, Real Estate and business services: 1.1%
- Government: 1.8%
- Personal services: 1.2%
- Actual GDP for Q1:2018: -2.2%
6 March 2018: Updated graphics using Q4:2017 data
The graphic below shows the latest GDP data as published by Statistics South Africa per sector in the SA economy. And again it is the agricultural sector that grew by a far greater pace than any of the other sectors quarter over quarter annualised. Even though agriculture only makes up around 2.5% of South Africa's economy, it contributed 0.8% of the 3.1% economic growth experienced by the South African economy for the 4th quarter of 2017.
Actual GDP growth for Q3:2017 was revised upwards from 2% to 2.3% and the latest results for Q4:2017 shows a further improvement in South Africa's economic growth. While the growth rates are improving its not even close to enough to make a dent in South Africa's massive unemployment problem. The increasing taxes, the higher VAT rate announced in the 2018 Budget is sure to halt some of the momentum gained by the South African economy in recent quarters.
And the talk and discussions regarding expropriation of land without compensation is bound to chase foreign investors away, or keep them from investing substantial amounts of money into South Africa until they have clarity regarding the policy by the ANC (and pushed for by the marxist EFF). This will further stunt growth in a economy that is desperate for fresh and new investment so the economy can grow at a faster rate and build some momentum which will spur on further growth and investment.
Every time it looks like the SA economy is gathering some speed and momentum, politicians do their level best to slow it down, Its as if they dont want people to prosper.
Actual GDP growth for Q3:2017 was revised upwards from 2% to 2.3% and the latest results for Q4:2017 shows a further improvement in South Africa's economic growth. While the growth rates are improving its not even close to enough to make a dent in South Africa's massive unemployment problem. The increasing taxes, the higher VAT rate announced in the 2018 Budget is sure to halt some of the momentum gained by the South African economy in recent quarters.
And the talk and discussions regarding expropriation of land without compensation is bound to chase foreign investors away, or keep them from investing substantial amounts of money into South Africa until they have clarity regarding the policy by the ANC (and pushed for by the marxist EFF). This will further stunt growth in a economy that is desperate for fresh and new investment so the economy can grow at a faster rate and build some momentum which will spur on further growth and investment.
Every time it looks like the SA economy is gathering some speed and momentum, politicians do their level best to slow it down, Its as if they dont want people to prosper.
Encouraging to see in the graphic above is that one of the biggest sectors in the SA economy, the finance, real estate and business services industry showed quarter on quarter growth of 2.5%. Lets hope the momentum in this sector continues as it will be a big driver of economic growth in SA going forward.
15 February 2018: Updated graphics using latest GDP data
As has been the trend in South Africa's GDP of late, the Agricultural sector is the major contributor to South Africa's economic growth at this time, with seasonally adjusted constant prices annualised growth in Agriculture sitting at 44.2% for the third quarter of 2017. This is largely due to agriculture coming off a very low base, thanks to the drought experienced in South Africa in 2015/2016. The drought lead to massive declines in outputs from agriculture, and now increased production in the sector due to significant rains in agricultural areas of South Africa is leading to output levels being far higher than the preceding years and giving rise to the significant growth rates of the sector in South Africa's GDP.
While the sector has shown significant growth in recent quarters it is still a very small sector in the overall economy.
In 2012 agriculture made up 2.34% of South Africa's GDP (when looking at industry value at 2010 constant prices). For Q3:2017, Agriculture made up 2.43% of South Africa's GDP. So while looking at the graphics below for 2017 and seeing the substantial growth experienced in the agricultural sector, its overall contribution to South Africa's GDP has remained fairly similar to the levels of say 2012. Infact the numbers below shows the agricultural sectors contribution to South Africa's GDP over the last 5 years as well as the latest quarter of 2017.
Agriculture sector size in South Africa's economy:
2012: 2.34%
2013: 2.39%
2014: 2.51%
2015: 2.34%
2016: 2.14%
Q3:2017: 2.43%
The above clearly shows that while Agricultural growth is extremely volatile and experience significant swings as shown in the quarterly graphics below, the size of the sector in SA' s overall economy is so small that even significant growth rates in the sector makes hardly any impact to the overall size of the sector in SA's economy
While the sector has shown significant growth in recent quarters it is still a very small sector in the overall economy.
In 2012 agriculture made up 2.34% of South Africa's GDP (when looking at industry value at 2010 constant prices). For Q3:2017, Agriculture made up 2.43% of South Africa's GDP. So while looking at the graphics below for 2017 and seeing the substantial growth experienced in the agricultural sector, its overall contribution to South Africa's GDP has remained fairly similar to the levels of say 2012. Infact the numbers below shows the agricultural sectors contribution to South Africa's GDP over the last 5 years as well as the latest quarter of 2017.
Agriculture sector size in South Africa's economy:
2012: 2.34%
2013: 2.39%
2014: 2.51%
2015: 2.34%
2016: 2.14%
Q3:2017: 2.43%
The above clearly shows that while Agricultural growth is extremely volatile and experience significant swings as shown in the quarterly graphics below, the size of the sector in SA' s overall economy is so small that even significant growth rates in the sector makes hardly any impact to the overall size of the sector in SA's economy
South Africa's GDP per quarter per industry (Production Method)
The interactive graphic below shows the GDP per quarter per industry. As users select one of the buttons in the graphic to choose a relevant quarter, the graphic will show the different growth rates of the different sectors of the economy for that quarter. Note the data is annualised. Essentially annualised data basically says if growth from the one quarter to the next were to remain the same for the next three quarter's the years growth would be as shown by the annualised growth rates.
2017
First thing readers will notice from the graphic above is that the agriculture and fishing industry has shown significant growth both in Q1:2017 and Q2:2017. This is largely a recovering taking place after the drought that South Africa experienced during 2016, so the numbers are coming off a very low base. The rest of the industries growth is pretty subdued and very close to the zero line. Indicative of South Africa's slow to no growth economic environment it finds itself in. South Africa's economy cannot continue to rely on it's primary industries to carry and grow it's economy as they are relatively small and more and more spending is heading towards the tertiary industries. What is a primary industry or tertiary industry? Below a brief description of various industry types:
- Primary industries: These usually refer to agricultural, forestry, fishing and mining industries in which the main activity is extraction of minerals or producing agricultural products. Not a lot of changes or enhancements are made to products at this level. (Agriculture and Mining falls in this category)
- Secondary industries: This refers to industries in which primary goods are used as an input in order to produce new/different goods and services. (Manufacturing, electricity, construction falls in this category)
- Tertiary industries: This typically refers to industries that supplies a service. Think Trade (retail, wholesale and motor trade) in which they supply a service by selling goods that was produced in the primary and secondary industries. Transport in which logistical services are provided. Finance and real estate services in which banking and property sales services are provided. Government services such as refuse, water etc. And personal services industries in which consumers pay for various services delivered. (Trade, Transport, Finance and real estate, Government, Personal services falls in this category)
2016
The graphic below provides an overview of South Africa's economic growth per sector per quarter for every quarter of 2016.
As mentioned in the review of the graphic on 2017, Agriculture has shown strong growth in 2017 coming off a low base caused by the drought in South Africa during 2016. The above graphic for 2016 clearly shows the decline in growth in agriculture during 2016. Mining also had a mixed year in 2016 with 2 positive quarters of growth and two negative quarters. The variability of both agriculture and the mining sectors is part of the reason we suggested that South Africa's economy should become less dependent on driving economic growth, as a lot of what affects these sectors are beyond human or government policy control. Lack of rain leading to agricultural declines cannot be prevented totally by government or policy setting, in the same way excess rain affecting coal mining cannot be stopped completely by plans and policies. Mother nature has a mind of her own and this cannot be changed, but the impact can be limited of proper plans and policies are in place and implemented properly. However there will always be this element of variability in these sectors.
The secondary and tertiary sectors are set to be more stable and easier for government to influence, steer and grow. And this is where we feel greater focus should be placed on by government. However government finds this hard to do as a large amount of their supports are employed in the agriculture and mining sectors. This any move by government that is seen as neglecting or shifting away from these industries would cost them votes at the polls (and this is obviously something they would want to avoid). And hence South Africa's continued dependence on primary industries to drive and grow SA's economy as well as trying to provide more jobs, even though these industries are shedding massive amounts of jobs.
Annual GDP growth rates
While the above looked at the quarter on quarter annualised growth rates, the graphic below takes a look at the year on year growth rates measured each quarter. And the story it tells about South Africa's economic growth rate is rather depressing, especially considering the fact that government initially had a growth target of 6% per year (now after Minister Gigaba's #MTBS2017 it seems even that pie in the sky growth target has been revised downwards to 5.4%). So in an ideal world, South Africa needs to grow at 5.4% per year in order to significantly reduce unemployment in South Africa. Take a look at the numbers below. We are not growing at anything near that pace.
In this graphic the highest year on year GDP growth rate for South Africa was recorded in March 2011, when it grew at 3.5%. Essentially from March 2010 to March 2011 South Africa's economy grew by 3.5%. Since then it has been a sad state of affairs for South Africa's economy. And while it looks like the declining trend has been reversed in the most recent quarters, the growth rates are so low, that it has little to no impact in addressing South Africa's social issues. The population is growing faster than the economy, which means that the South African economy, expressed per person in South Africa (per capita) is declining. Thus South Africans overall economic welfare is declining. And has been doing so for years. Especially when expressed in US Dollars
GDP Expenditure
This section will focus on GDP calculated from the expenditure side, and in particular on Household expenditure as this contributes roughly 70% of total spending in the economy. The bar chart below shows total household spending in South Africa on various categories. Total household spending for quarter 2:2017 (March to June 2017) amounted to just under R669billion (putting annual spending by South African households close to R2.7trillion a year.
The bulk of consumer spending as shown above is spent on Food and non-alcoholic beverages, with housing and transport making up the 2nd and 3rd biggest spending categories of household spending in South Africa.