South Africa’s gross domestic product (GDP) expanded by 1,9% in the first quarter of 2022, representing a second consecutive quarter of upward growth. The size of the economy has returned to pre-pandemic levels, with real GDP slightly higher than what it was before the Covid-19 pandemic.
These statistics cover the first quarter of the year (January to March), which means the results of the economic impact of the devastating floods in KwaZulu-Natal, which occurred during the second quarter in April, will only reflect in the GDP results due for release in September.
Within manufacturing, petroleum, chemicals, rubber, and plastic products were the largest contributors to increased production in the first quarter. Other divisions such as the food and beverage industry; basic iron and steel, nonferrous metal products, metal products and machinery division and motor vehicles among others made significant contributions to overall GDP growth.
Don Consultancy Group chief economist Chifi Mhango says the latest GDP figures are “positive news” as they surpassed the group’s previous estimate of 1.2% growth. “We are highly impressed by the performance of the manufacturing secure with a 4.9% growth with, while, at the same time, being disappointed with the performance of the mining sector,” he says.
After the manufacturing, trade, catering, and accommodation industry was the second-highest contributor to lifting GDP, rising 3.1% in the period under review, and adding 0.4 of a percentage point overall.
The construction sector experienced a decline of 0.7% but did not decrease the overall GDP figure. The decline in the construction sector is a concern for Mhango, who says the construction sector is now dominating in terms of job shedding in the first quarter, with 60,000 positions lost, says Mhango.
“The South African government has put more emphasis when it comes to infrastructure investment, therefore the current trend is worrying in relation to signs of implementation of various projects,” he says.
Source: Engineering News, Stats SA, Cape Talk, image from Engineering News