South Africa's GDP page:
Last updated (30 October 2017)
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).
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.
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)
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
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.