27 May 2015
Gross domestic product (GDP) slowed to 1.3% in the first quarter of 2015, Statistics South Africa (Stats SA) said yesterday.
“The seasonally adjusted real GDP at market prices for the first quarter of 2015 increased by an annualised rate of 1.3%,” said statistician-general Pali Lehohla. This was down from a 4.1% increase in the fourth quarter of 2014.
The main contributors to the increase in economic activity were the mining and quarrying industry (which contributed 0.8% based on growth of 10.2%), and finance, real estate and business services (which contributed 0.7% based on growth of 3.8%).
According to Stats SA, the positive growth in mining and quarrying was due to higher production in the mining of coal and mining of “other” metal ores including platinum, while the growth in finance, real estate and business services was due to increased activities in banking from financial intermediation services and equity, bond and other financial markets in auxiliary activities.
The wholesale, retail and motor trade, catering and accommodation industry also contributed to economic activity at 0.2% based on growth of 1.2%. This growth was due to an increase in turnover in the wholesale and retail trade divisions.
However, negative contributions were recorded by the agriculture, forestry and fishing industry (-0.4%) and the manufacturing industry (-0.3%). Economic activity in the latter reflected negative growth of 2.4% as a result of lower production in petroleum, chemical products, rubber and plastic products, and wood and wood products, among other divisions.
The unadjusted real GDP at market prices increased by 2.1% during the first quarter of 2015 (year-on-year). Nominal GDP was estimated at R965-billion for the quarter, R14-billion less than the fourth quarter last year.
Economic growth slowed more than anticipated, with the markets expecting growth on average of 1.6%.
“When compared with the same quarter a year ago, the economy fared better (expanding by 2.1% from the fourth quarter’s 1.3%), but this mainly reflects the impact of last year’s strike-inflicted base,” said Nedbank economists.
According to Nedbank economists, the economy is still expected to grow by a subdued 2.2% in 2015 as a whole. This is helped by moderately firmer retail activity and some recovery in mining off last year’s low base.
However, the upside will be contained by load shedding, lower international commodity prices and subdued global demand, they said.
“Today’s GDP figures are consistent with the Reserve Bank’s general assessment of the economy, reflecting little underlying momentum, with considerable downside risks emanating from the country’s electricity woes, other structural constraints and policy uncertainties.”
Stats SA also released employment data yesterday, saying South Africa’s unemployment rate increased to 26.4% in the first quarter of 2015.
This was up from the 24.3% in the last quarter of 2014, this as the data had been revised to take account of the changes to the structure of the population revealed in the 2011 census. The last time this was done was in 2007 using the 2001 census.
“The results for quarter one show that the working age population was 35.8 million – 15.5 million employed, 5.5 million unemployed and 14.8 million not economically active. Thus resulting in an unemployment rate of 26.4%,” said Lehohla, speaking at a media briefing on the release of the first quarter results of 2015 of the Quarterly Labour Force Survey.
In its survey that polls households, Stats SA said that the formal sector accounted for the largest share of employment at 69.8% while agriculture accounted for the lowest share. Around 16% of the not economically active population was accounted for by the discouraged, while more than 80% was due to other reasons, such as being a student or a home maker.
Not economically active
“The results for quarter one of 2015 reflect a decrease in the not economically active population in favour of the economically active population,” noted the report.
The number of employed people increased by 140 000 in the first quarter with large quarterly gains observed in the finance (156 000), agriculture (150 000) and private households industries (69 000). Job losses were recorded in the trade, transport, and community and social services industries (at 201 000, 53 000 and 51 000 respectively).
The expanded unemployment rate, which includes people who have stopped looking for work, increased by 1.5% to 36.1%. The share of the employed population with tertiary education was highest among the white (46.3%) and Indian/Asian (34.2%) population groups. Over half of employed black Africans and the coloured population did not complete their matric education.
Nedbank economists said that labour market conditions were unlikely to improve significantly in the months ahead.