South Africa recorded an estimated 0,4% GDP Growth in the first quarter of 2023 between January‒March. This is after contracting by a revised 1,1% in the fourth quarter of 2022. Stats SA released the latest GDP growth figures on Tuesday Morning.
MANUFACTURING AND FINANCE MAIN DRIVERS TO SA GDP GROWTH
The manufacturing and finance industries were the major drivers of growth on the supply side of the SA economy. The demand side was lifted by exports, with smaller positive contributions for household, government, and investment spending.
Eight of the ten industries recorded growth in the first three months of the year with manufacturing and finance, real estate and business services the largest positive contributors. Manufacturing output increased by 1,5%, adding 0,2 of a percentage point to GDP growth. The production of food and beverages was the main catalyst behind the industry’s positive showing.
Finance, real estate and business services crept up by 0,6%. Mainly driven by financial intermediation, insurance and pension funding, real estate and business services.
Personal services increased by 0,8%, driven by increased activity in community services.
EXPORTS THE POSITIVE CONTRIBUTOR TO EXPENDITURE ON GDP
Statistics SA also measures the expenditure side of GDP, providing an indication of total demand in the economy. This includes measures of government consumption, household consumption, investment (gross fixed capital formation and changes in inventories), and net exports.
South African exports were buoyant in the first quarter, expanding by 4,1%. Export growth was mainly driven by increased trade in base metals, food (vegetable products, prepared foodstuffs & beverages) and machinery and electrical equipment.
Mirroring the rise in construction on the supply side of the economy, gross fixed capital formation increased on the back of government investment. While the private sector and public corporations made smaller positive contributions, their impact was not on the same scale as the government.
Households increased spending on restaurants and hotels by 6,9%. This budget item was the largest positive contributor to the 0,4% rise in overall household consumption expenditure.
Imports were also up in the first quarter, mainly driven by increased trade in machinery and equipment, chemical products, vehicles & transport equipment, and prepared foodstuffs and beverages.