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South Africa's Economic Structure from 1994 to 2015:
Note data is based on 2010 constant prices (effects of inflation removed), and its GDP at basic prices (excluding taxes and subsidies) Let the animation run, or select a year, and pause and resume as you see fit. |
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The above animation tells a tale of opposing fortunes over time for various industries in South Africa, On the one hand a few sectors have lost their shine and their relative importance to the South African economy and has been dwindling away over the years, while on the other hand other sectors have made significant gains over the same time period. Ones losses is another's gain. So the main winners and losers are:
The Losers:
The Winners:
As mentioned in our Economic History page, South Africa had a strong manufacturing sector when the democracy was born. But its been declining slowly ever since. Increased trade with the rest of the world has resulted in more goods being imported and less demand for locally manufactured goods. Leading to the decline in the relative importance of this industry over time in South Africa
The largest decliner in terms of relative importance of all industries in South Africa, is the Mining and Quarrying industry. Various factors have lead to the slow gradual decline of the industry in South Africa. Increasing costs (due to mines becoming deeper and more dangerous and expensive to mine, in particular gold mines), power supply problems, mine safety, labour unrest all adding to the bag of factors causing the decline of this industry in South Africa.
The government sector has seen a small decline in relative importance over the years too. This should be seen as a good thing as a country's economy does not want to be to dependent on spending of the state, but rather of the various business industries.
On the winning side, the Trade industry has made some significant gains in terms of its relative importance to the South African economy, One has to wonder what percentage of the increased demand for trade related goods are fuel by and paid for with consumer debt. I.e consumers taking on large amounts of debt to buy cars, fancy electronics etc. Take a look at our credit market analysis here.
The Losers:
- Mining and Quarrying
- Manufacturing
- Government
The Winners:
- Finance, Real Estate and Business Services
- Trade (Wholesale, Retail, Motor Trade)
- Transport and Communication
As mentioned in our Economic History page, South Africa had a strong manufacturing sector when the democracy was born. But its been declining slowly ever since. Increased trade with the rest of the world has resulted in more goods being imported and less demand for locally manufactured goods. Leading to the decline in the relative importance of this industry over time in South Africa
The largest decliner in terms of relative importance of all industries in South Africa, is the Mining and Quarrying industry. Various factors have lead to the slow gradual decline of the industry in South Africa. Increasing costs (due to mines becoming deeper and more dangerous and expensive to mine, in particular gold mines), power supply problems, mine safety, labour unrest all adding to the bag of factors causing the decline of this industry in South Africa.
The government sector has seen a small decline in relative importance over the years too. This should be seen as a good thing as a country's economy does not want to be to dependent on spending of the state, but rather of the various business industries.
On the winning side, the Trade industry has made some significant gains in terms of its relative importance to the South African economy, One has to wonder what percentage of the increased demand for trade related goods are fuel by and paid for with consumer debt. I.e consumers taking on large amounts of debt to buy cars, fancy electronics etc. Take a look at our credit market analysis here.
Finance, real estate and business services has seen strong growth in terms of its importance to South Africa's economy. This can be explained by more South Africans having access to financial services like bank accounts, more citizens buying bonded houses, investing, taking on loans and more businesses supplying services to other businesses (outsourcing of certain services to other businesses). For example a retail business paying a security services company to guard the retail premises.
The Transport, Storage and Communications sector has also shown steady growth over the years. This is largely due to sanctions being lifted against South Africa. This lead to people being allowed to travel to the country and countries being allowed to trade with South Africa. The increased "openess" of South Africa's economy lead to a surge in trade with the rest of the world. Thus harbours and airports being used more, leading to the growth in the importance of these sectors in South Africa's economy.
Other interesting observations is the fact that Electricity, Gas and Water industry has dropped off slowly in terms of relative importance to South Africa's GDP, especially from 2008 when ESKOM's now infamous loadshedding started. Electricity usage has declined over the last number of years, partly due to significant price increases and partly due to less demand for electricty (as businesses become more electricity efficient, especially after loadshedding started and calls from ESKOM to user electricity more efficiently).
Construction showed significant advances in the years leading up to the 2010 Soccer World Cup hosted in South Africa, as massive infrastructure projects where undertaken to ready the country for the event.
The Transport, Storage and Communications sector has also shown steady growth over the years. This is largely due to sanctions being lifted against South Africa. This lead to people being allowed to travel to the country and countries being allowed to trade with South Africa. The increased "openess" of South Africa's economy lead to a surge in trade with the rest of the world. Thus harbours and airports being used more, leading to the growth in the importance of these sectors in South Africa's economy.
Other interesting observations is the fact that Electricity, Gas and Water industry has dropped off slowly in terms of relative importance to South Africa's GDP, especially from 2008 when ESKOM's now infamous loadshedding started. Electricity usage has declined over the last number of years, partly due to significant price increases and partly due to less demand for electricty (as businesses become more electricity efficient, especially after loadshedding started and calls from ESKOM to user electricity more efficiently).
Construction showed significant advances in the years leading up to the 2010 Soccer World Cup hosted in South Africa, as massive infrastructure projects where undertaken to ready the country for the event.
Data disclaimer:
Constant 2010 prices (I.e prices adjusted for inflation and values expressed in terms of 2010 prices) are used to determine the relative contribution of each industry. The contribution of each industry is calculated as the percentage contribution of that industry to the total of all industries for the specific year in question. Feel free to contact us for further information.
Data Source: Statistics South Africa.
Constant 2010 prices (I.e prices adjusted for inflation and values expressed in terms of 2010 prices) are used to determine the relative contribution of each industry. The contribution of each industry is calculated as the percentage contribution of that industry to the total of all industries for the specific year in question. Feel free to contact us for further information.
Data Source: Statistics South Africa.