South Africa’s Q4 GDP growth exceeds expectations as manufacturing, mining recover strongly

By bne IntelliNews February 24, 2015

A robust recovery of the manufacturing and mining industries helped South Africa’s economy grow 4.1% q/q on a seasonally adjusted and annualised basis in the fourth quarter of last year, speeding up from an upwardly revised 2.1% q/q growth in the preceding quarter, well above expectations, data from Statistics South Africa showed. Analysts polled by the Business Day predicted a 3.5% growth, while a Reuters poll suggested a 3.7% expansion. Q3 GDP growth was revised form an initial estimate of 1.4%.

The country’s full-year GDP growth slowed to 1.5% last year from 2.2% in 2013, but was above analyst and official estimates of a 1.4% expansion.

On an unadjusted y/y basis, the country’s real gross domestic product at market prices increased by 1.3% in Q3, decelerating from a revised 1.6% (from 1.4%) growth in Q3.

The main driver for the 4.1% quarterly GDP growth was the manufacturing industry (contribution of 1.2pp), which rebounded to a 9.5% growth after three consecutive quarters of contraction affected by strikes. The mining sector also outperformed, posting a 15.2% growth, up from 3.9% in Q3, and contributed 1.1pp to the overall development. Next, the finance, real estate and business services industry contributed 0.7pp to the overall GDP growth, on the back of a 3.5% expansion, up from 2.4% in Q3.

On a y/y basis, the best performing sectors in Q4 were agriculture (+4.2%), construction (+2.9%), and transport, storage and communication (+2.6%). On the opposite sides, the mining industry contracted 1.6% and the utilities sector shrank 0.9% y/y.

The nominal GDP at market prices was ZAR979bn ($84bn) in Q4, by ZAR16bn more than in Q3. The largest industries, as measured by their nominal value added in Q4, were finance, real estate and business services with a share of 20.7%, general government services with 16.9%, the wholesale, retail and motor trade and catering and accommodation industry with 16%, and the manufacturing industry with 13.7%. For the full-year 2014, nominal GDP was ZAR3.8trn.

South Africa’s GDP growth is expected to strengthen to around 2.2% this year, driven by improved labour relations, lower oil prices, and increasing exports, but constrained by electricity supply disruptions.

Related Articles

South Africa’s power utility Eskom seeking ways to support Bitcoin mining, energy-intensive technologies

South Africa’s state-owned power utility Eskom is exploring opportunities to support Bitcoin mining, artificial intelligence (AI) development, and data centres to help its future ... more

EFCC arrests ex-NNPCL official and previous Warri managing director

Nigeria’s Economic and Financial Crimes Commission (EFCC) has arrested a former CFO of the Nigerian National Petroleum Co. Ltd (NNPCL), as well as a former managing director of 125,000 barrels per ... more

Fitch warns Ghana’s reserves at risk if gold prices plunge amid global geopolitical shifts

A sharp fall in global gold prices, now sitting above a record-high $3,300 per ounce, could rapidly erode Ghana’s international reserves and trigger fresh economic instability, ... more

Dismiss