The South African formal business sector1 generated R2,57 trillion in turnover in the fourth quarter of 2018. This translates to about R323 600 generated every second from October 2018 to December 2018.
The R2,57 trillion was 5,5% more than the R2,44 trillion generated in the third quarter (July 2018 to September 2018). This follows a rise of 3,6% in the third quarter and 2,2% in the second quarter.
The 5,5% rise in the fourth quarter was mostly underpinned by increased activity in trade and manufacturing, both of which are quite seasonal. The trade industry, which includes stores and supermarkets, saw its turnover climb by 6,3% on the back of increased consumer spending over the festive period. The production of beverages and motor vehicle parts contributed to higher turnover in the manufacturing industry.
Real estate and other business services; community and personal services; transport and communication; and mining also enjoyed increases in the fourth quarter. The transport and communication industry was mostly boosted by activity in land transport.
Rising platinum prices helped the mining industry increase turnover by 4,9%.
The two industries that contracted in the fourth quarter were construction and electricity, gas and water supply. Construction’s 0,9% fall in turnover coincides with the industry entering recession, according to recent gross domestic product (GDP) data.2
Total spending in the formal business sector amounted to R2,55 trillion in the fourth quarter of 2018, which is an increase of 5,1% compared with the third quarter of 2018.
The largest expenditure items were purchases, taking up 60,5% of total spending, followed by employment costs (14,5%). Expenditure items such as interest on debt, royalties, hiring of vehicles and machinery, and renting of buildings contributed 9,9%. A miscellaneous category, referred to as “other expenditure”, contributed 15,1%.
Total net profit before tax amounted to R144,2 billion in the fourth quarter of 2018, slumping by 17,0% from the R173,6 billion recorded in the third quarter of 2018.
For more information, download the December 2018 Quarterly Financial Statistics (QFS) report here.
1 In the QFS, the formal business sector includes private businesses and public corporations, but excludes agriculture, financial intermediation, insurance, government institutions and educational institutions.
2 Stats SA, Economy edges up by 0,8% in 2018 (read here).
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