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Growth in the SA economy decreased 0.2% from the second to the third quarter, slightly worse than expectations, with analysts polled by Reuters having predicted a 0.1% contraction.
Compared to the same quarter in 2022, the economy was 0.7% smaller - the first negative number since the first quarter of 2021, says PwC senior economist Christie Viljoen. Viljoen says this signalled broad weakness in the economy, with six out of the 10 industries recorded a year-on-year decline in activity.
The agriculture, forestry and fishing industry declined 9.6% in the third quarter, and this was primarily due to decreased economic activities reported for field crops, animal products and horticulture products, Stats SA said. The manufacturing industry dropped 1.3% and the construction industry 2.8%.
The third quarter figure represents the SA economy’s first drop this year, with gross domestic product (GDP) growth having been 0.4% in the first quarter and 0.5% in the second.
"While the intensity of power shortages declined by 18.8% relative to the second quarter, a substantial 5 942GW of electricity was shed over the quarter, with 121 more hours of load shedding and more time spent at Stages 1 to 4," Nedbank said in a note.
Household final consumption expenditure decreased by 0.3% in the third quarter, and the main negative contributors were expenditure on transport, housing, water, electricity, gas and other fuels.
Total gross fixed capital formation declined by 3.4% in the third quarter. Some of the main contributors were machinery and other equipment and transport equipment.
Exports of goods and services increased by 0.6%, while imports dropped 8.6%.
In 2024, the power crisis, other logistical constraints, weaker global demand, and lower international commodity prices will continue to undermine production across sectors, Nedbank said.
"The cumulative 475-basis point hike in interest rates will continue to strain household finances, weighing on consumer confidence and demand. These pressures will cap the upside for services. Altogether, we expect meagre growth."
