South Africa’s economy expanded by 3% q/q on a seasonally adjusted and annualised basis in the second quarter of 2013, accelerating from a 0.9% growth in the first quarter, preliminary data from Statistics South Africa showed. The main driver of the improvement was the rebound of the manufacturing industry, which grew by 11.5%, contributing 1.7pps to the overall economic growth, following a 7.9% quarterly contraction in Q1 2013. Manufacturing contributes 11% to South Africa's gross domestic product (GDP).
The second biggest contributor to the GDP growth was the finance, real estate and business services sector, which expanded by 3.5% q/q and contributed 0.8pps thanks to increased activities in the banking sector and capital markets. The wholesale, retail and motor trade and the catering and accommodation industry contributed 0.4pps to GDP growth, based on growth of 3.2%. On the other hand, the mining sector, which expanded by 14.6% q/q in Q1, shrank by 5.6% in Q2, reflecting lower output of gold, platinum and diamonds. Mining companies have been troubled by falling metal prices, rising input costs and high wage demands.
The current strikes in the car manufacturing and construction sectors and the high probability of a new strike in the gold mining sector are threatening South Africa’s further economic recovery. The country was rattled in the second half of last year by a widespread wave of strikes in the mining sector, which dented economic growth and led to credit rating downgrades. Separate industrial auctions have been observed also this year.
On an unadjusted year-on-year basis, economic growth edged up to 2% in Q2 from 1.9% in Q1. The sectors with the best performance were the agriculture, forestry and fishing industry with a 6.7% y/y growth, the manufacturing industry with a 2.7% rise, finance, real estate and business services with a 2.6% increase, and the trade sector with 2.4% growth.
For the first half of 2013, real GDP growth was 3% y/y.
The largest industries, as measured by their nominal value added in Q2 2013, were the finance, real estate and business services with 21%, the general government services with 16.7%, the wholesale, retail and motor trade and catering and accommodation industry with 15.8%, and the manufacturing industry with 11%.
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