SOUTH Africans can brace themselves for weeping and gnashing of teeth as Stats SA announced on Tuesday that the country’s gross domestic product (GDP) for the second quarter fell by 51%, an unprecedented plunge caused by the National Lockdown effected in April to contain the spread of COVID-19.
This was the fourth consecutive decline in quarterly GDP since the second quarter of 2019.
Not even the sectors that offer essential services and were operational through the lockdown could help an ailing economy, with only food production showing positive growth.
The agriculture, forestry and fishing industry was the only positive contributor to GDP growth, with an increase of 15,1% and a contribution of 0,3 of a percentage point to GDP growth.
The increase was mainly due to increased production of field crops, horticultural and animal products.
Stats SA says the manufacturing sector contracted by 74,9% in the second quarter.
All 10 manufacturing divisions reported negative growth rates in the second quarter, with all 10 sub-sectors reporting negative growth.
The trade, catering and accommodation industry fell by 67,6% with decreased economic activity reported in both wholesale trade and retail trade, or warehouses to the shop floor, motor trade, catering and accommodation.
The sector was hit because only a few essential items were sold in the early stages of the lockdown whole accommodation establishments were closed.
The transport, storage and communication industry decreased by 67,9 with declines across the board in land, air and sea transport as well as supporting services.
Stats SA further reported that the mining and quarrying industry decreased by 73,1% also owing to global lockdown restrictions.
Demand for various commodities is now showing signs of recovery.
The finance, real estate and business services industry decreased by 28,9% and contributed -5,4 of a percentage point to GDP growth.
The sector has been the backbone of the SA economy for the decade or more and has grown the most over the past two decades.
Measure using the expenditure, which calculates actual spending and is preferred by the Reserve Bank, real GDP fell by 52,3% in the second quarter of 2020.
Household final consumption expenditure decreased by 49,8% in the second quarter, contributing -30,8 percentage points to total growth.
The largest decreases were reported for expenditures on semi-durable and durable goods as the sale of these goods was largely restricted during lockdown.
Spending by government decreased by 0.9, despite increased spending for the purchase of personal protective equipment and other emergency supplies on account of COVID-19, total spending on goods and services declined.
Gross fixed capital formation, which measures accumulated capital and machinery for infrastructure delivery, decreased by 59,9%, dragged down by a fall in building works and imported machinery, among others.
Net exports also contributed negatively to growth in expenditure on GDP in the second quarter.
Exports of goods and services were down 72,9%, while imports of goods and services decreased by 54,2%.
(COMPILED BY INSIDE POLITICS STAFF)