{"id":15728,"date":"2022-09-06T11:30:34","date_gmt":"2022-09-06T09:30:34","guid":{"rendered":"https:\/\/www.statssa.gov.za\/?p=15728"},"modified":"2022-09-06T11:30:34","modified_gmt":"2022-09-06T09:30:34","slug":"south-african-gdp-declines-by-07","status":"publish","type":"post","link":"https:\/\/www.statssa.gov.za\/?p=15728","title":{"rendered":"South African GDP declines by 0,7%"},"content":{"rendered":"

After two consecutive quarters of positive growth, real gross domestic product (GDP) decreased by 0,7%1<\/sup> in the second quarter of 2022 (Q2:\u00a02022). The devastating floods in KwaZulu-Natal and load shedding contributed to the decline, weakening an already fragile national economy that had just recovered to pre-pandemic levels.<\/p>\n

Manufacturing the biggest drag on GDP<\/strong><\/p>\n

The flooding had a negative impact on a number of industries, most notably manufacturing.<\/p>\n

Manufacturing is the largest industry in KwaZulu-Natal, according to 2019 data, accounting for a fifth of national manufacturing production.2 <\/sup>The damage to factories and plants, and disruptions to logistics and supply chains, pulled national manufacturing output down by 5,9% (Figure\u00a01). The biggest drags on growth were petroleum and chemical products, food and beverages, and transport equipment.<\/p>\n

\"gdp1\"<\/a><\/p>\n

Trade, catering & accommodation was negatively impacted by both the floods in KwaZulu-Natal and power cuts across the country. The industry recorded a contraction of 1,5% as\u00a0 floods damaged retail outlets and storage facilities. There was also a loss of trading hours due to load shedding.<\/p>\n

Mining production was dragged lower by gold, coal and diamonds, with the decrease in coal production caused partly by the flooding. Mining output was also negatively affected by load shedding.<\/p>\n

Economic activity in the electricity, gas & water supply industry was hampered mainly by load shedding due to lack of generation capacity. There were disruptions to water supply too, caused by both the floods in KwaZulu-Natal and drought in Eastern Cape.<\/p>\n

Agriculture, forestry & fishing activity decreased by 7,7%, pulled lower by a decrease in the production of animal products. Electricity outages and the spread of foot-and-mouth disease contributed to the decline.<\/p>\n

On the upside, the finance, real estate & business services industry made the biggest positive impact on GDP growth in Q2:\u00a02022, rising by 2,4%. Growth was driven by increased activity in the banking sector, as well as in insurance and pension funding.<\/p>\n

Economic recovery from COVID-19: Not all industries are equal<\/strong><\/p>\n

The economy took almost two years to recover from the impact of COVID-19, with real GDP reaching pre-pandemic levels in Q1:\u00a02022 (Figure\u00a02). The recovery was short lived, with the 0,7% decline in Q2:\u00a02022 dragging GDP back below the Q4:\u00a02019 pre-pandemic level of R1\u00a0148\u00a0billion.<\/p>\n

\"gdp2\"<\/a><\/p>\n

The story of recovery is more complicated when we consider the industries. Adopting the same methodology used in a recent article that compared South Africa\u2019s COVID-19 recovery with other countries3<\/sup>, Figure 3 shows how long each industry took to recover to its Q4:\u00a02019 level, from Q2:\u00a02020 when national economic activity was at its lowest.<\/p>\n

By Q2:\u00a02022, only four industries were at or above their pre-pandemic levels of production. After slumping in Q2:\u00a02020, the finance, real estate & business services industry took two quarters to recover to its Q4:\u00a02019 level, while personal services took three quarters to get back on its feet.<\/p>\n

\"gdp3\"<\/a><\/p>\n

In terms of this indicator (real value added), agriculture, forestry & fishing and government seem to have weathered the pandemic relatively well.<\/p>\n

Six industries have not yet recovered, with construction currently in the worst shape. The construction industry is 24% smaller than it was before the pandemic. Mining briefly recovered in Q2:\u00a02021 but has since remained below its Q4:\u00a02019 level.<\/p>\n

For more information, download the latest GDP release, media presentation and Excel files here.<\/a><\/p>\n

 <\/p>\n

1 <\/sup>The quarter-on-quarter rates are seasonally adjusted and in real (volume) terms (constant 2015 prices).<\/p>\n

2 <\/sup>Stats SA, Quarterly and Regional Fourth_quarter 2020<\/em> Excel file, Tables 21b and 28b (download here<\/a>).<\/p>\n

3 <\/sup>Stats SA, Economic recovery from COVID-19: Not all countries are equal<\/em> (read here<\/a>).<\/p>\n

Similar articles are available on the Stats SA website and can be accessed here<\/a>.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

After two consecutive quarters of positive growth, real gross domestic product (GDP) decreased by 0,7%1 in the second quarter of 2022 (Q2:\u00a02022). The devastating floods in KwaZulu-Natal and load shedding contributed to the decline, weakening an already fragile national economy that had just recovered to pre-pandemic levels. Manufacturing the biggest drag on GDP The flooding   read more »<\/a><\/p>\n

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