SA GDP up by 1.1% in first quarter

The South African Gross Domestic Product (GDP) grew by 1.1% in the first three months of 2021, Statistician General Risenga Maluleke has revealed.

This growth, he said, translated into an annualised growth rate of 4.6%.

“This follows a revised 1.4% (annualised: 5.8%) rise in real gross domestic product (GDP) in the fourth quarter of 2020,” said Statistics South Africa (StatsSA).

The finance, mining and trade industries were the main drivers of output on the production (supply) side of the economy, while household spending and changes in inventories helped spur growth on the expenditure (demand) side.

Maluleke said despite this being the third consecutive quarter of positive growth, the South African economy is 2.7% smaller than it was in the first quarter of 2020.

Eight of the 10 industries recorded positive gains in the first quarter of 2021, with finance, mining and trade making the most significant contributions.

Statistics reveal that finance, real estate and business services increased at a rate of 7.4% in the first quarter, and made the largest contribution to GDP growth, namely 1.5 percentage points.

StatsSA said increased economic activity was reported for financial intermediation, auxiliary activities, real estate activities and other business services.

“The mining and quarrying industry increased at a rate of 18.1% and contributed 1.2 percentage points to GDP growth.

“Increased production was reported for platinum group metals (PGMs), iron ore and gold. The trade, catering and accommodation industry increased at a rate of 6.2%, contributing 0.8 of a percentage point to GDP growth,” reads the report.

The stats agency said increased economic activity was reported in wholesale trade and retail trade during this period.

“The transport, storage and communication industry increased at a rate of 4.8%, contributing 0.4 of a percentage point. Increased economic activity was reported for land transport and communication services.

“The manufacturing industry increased at a rate of 1.6% in the first quarter, contributing 0.2 of a percentage point to GDP growth. Five of the ten manufacturing divisions reported positive growth rates in the first quarter,” said Maluleke.

The divisions that made the largest contributions to the increase were motor vehicles, parts and accessories and other transport equipment; and wood and wood products, paper, publishing and printing. The personal services industry increased at a rate of 1.7% in the first quarter. Increases were reported for community services and other producers.

Data revealed by the agency on Tuesday showed expenditure on real gross domestic product increased at an annualised rate of 4.5% in the first quarter of 2021.

“Household final consumption expenditure increased at a rate of 4.7% in the first quarter, contributing 3.0 percentage points to total growth.

“The highest growth rates were seen in durable and semi-durable goods and the largest contributors to growth were expenditures on durables goods and services.

In the three months, consumption expenditure by general government increased at a rate of 1.0% in the first quarter.

Increases in compensation of employees and spending on goods and services were reported in the first quarter.

StatsSA added that gross fixed capital formation decreased at a rate of 2.6%, with machinery and equipment being the main contributor.

“There was a R53.2 billion (annualised) drawdown of inventories in the first quarter of 2021.

“Large decreases in mining and trade contributed to the inventory drawdowns experienced in the first quarter of 2021,” said the agency.

Net exports contributed negatively to growth in expenditure on GDP in the first quarter, with exports of goods and services decreased at a rate of 0.9%. This was largely influenced by decreased trade in mineral products and vehicles and other transport equipment. Imports of goods and services increased at a rate of 26.5%, driven largely by increases in mineral products, machinery and equipment, and vehicles and transport equipment.