S.Africa's Q2 GDP growth quickens to 3 per cent - CNBC Africa

S.Africa's Q2 GDP growth quickens to 3 per cent

Southern Africa

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According to Statistics South Africa, which released GDP growth for the second quarter on Tuesday, the economy grew 2.0 per cent in the second quarter from 1.9 per cent in the previous three months on an unadjusted year-on-year basis.

 “If you look at that number, we had that growth only 0.9 per cent in the first quarter, which totally shocked the market. We were expecting something like 2.1 per cent. If you look at that number just and what actually drove it, the first thing is the manufacturing sector, which accounted for about 1.7 percentage points of that three per cent,” Nedbank Capital economist Busisiwe Radebe told CNBC Africa on Tuesday.

“The manufacturing numbers we’ve been seeing, a big role there was played by that particular division. I think manufacturing value added by the sector was actually improved to about 11.5 per cent in the second quarter and that was from a decline of about 7.9 per cent in the first quarter.”

For the past four months, South Africa has been above 50 in the Purchasing Manager’s Index, which is an indication of the health of South Africa’s manufacturing economy.

The value added from the finance, real estate and business sectors was accelerated only marginally to 3.5 per cent in the second quarter from 3.3 per cent in the first quarter. In 2012, the sector made up 21.5 per cent of GDP.  

 “We we should also think of other impacts that the weaker rand has, such as the impact it has on inflation. We can look at the impact of the rand on exports but then we also should look at things like the impact of our infrastructure and supply constraints, and just getting containers out of our ports. That actually has a bigger influence,” Radebe explained.

 “Going into the third quarter, the general picture is growth is still actually patchy. If you look at all the industries, the numbers are not shooting the lights out. You can’t expect the same improvement in the third quarter because we has strikes in gold mining, in motor vehicle manufacturing so that is going to have a negative impact on what’s going on in the third quarter.”

According to Statistics South Africa, which released GDP growth for the second quarter on Tuesday, the economy grew 2.0 per cent in the second quarter from 1.9 per cent in the previous three months on an unadjusted year-on-year basis.

 “If you look at that number, we had that growth only 0.9 per cent in the first quarter, which totally shocked the market. We were expecting something like 2.1 per cent. If you look at that number just and what actually drove it, the first thing is the manufacturing sector, which accounted for about 1.7 percentage points of that three per cent,” Nedbank Capital economist Busisiwe Radebe told CNBC Africa on Tuesday.

“The manufacturing numbers we’ve been seeing, a big role there was played by that particular division. I think manufacturing value added by the sector was actually improved to about 11.5 per cent in the second quarter and that was from a decline of about 7.9 per cent in the first quarter.”

For the past four months, South Africa has been above 50 in the Purchasing Manager’s Index, which is an indication of the health of South Africa’s manufacturing economy.

The value added from the finance, real estate and business sectors was accelerated only marginally to 3.5 per cent in the second quarter from 3.3 per cent in the first quarter. In 2012, the sector made up 21.5 per cent of GDP.  

 “We we should also think of other impacts that the weaker rand has, such as the impact it has on inflation. We can look at the impact of the rand on exports but then we also should look at things like the impact of our infrastructure and supply constraints, and just getting containers out of our ports. That actually has a bigger influence,” Radebe explained.

 “Going into the third quarter, the general picture is growth is still actually patchy. If you look at all the industries, the numbers are not shooting the lights out. You can’t expect the same improvement in the third quarter because we has strikes in gold mining, in motor vehicle manufacturing so that is going to have a negative impact on what’s going on in the third quarter.”

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