By Thebe Mabanga
South Africa’s economy contracted by 0.2% in the second quarter of this year, ending six consecutive quarters of growth, after increasing by 0.4% in the first quarter, Statistics South Africa reported on Tuesday.
Mining, trade and manufacturing drove the decline in economic activity on the production side of the economy.
The trade, catering and accommodation industry decreased by 1.9%, contributing -0.2 of a percentage point to GDP growth.
“Decreased economic activities were reported for wholesale trade, motor trade and food and beverages,” Stats SA said.
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The manufacturing industry fell by 1.8%, also contributing -0.2 of a percentage point. Seven of the 10 manufacturing divisions recorded negative growth.
Stats SA said food and beverages; furniture and other manufacturing; and basic iron and steel, non-ferrous metal products, metal products and machinery were the largest negative contributors.
Mining and quarrying fell by 3%, contributing -0.1 of a percentage point, with declines recorded in the production of platinum group metals, manganese ore, gold and iron ore.
Finance, real estate and business services rose by 0.3%, contributing 0.1 of a percentage point, while transport, storage and communication rose by 0.9%, also contributing 0.1 of a percentage point. Stats SA said transport growth was driven by an increase in land transport.
Expenditure on real GDP also fell by 0.2% after increasing by 0.4% in the first quarter.
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Imports rose by 4.9% during the quarter, largely due to increased imports of machinery and electrical equipment and mineral products, while exports increased by 0.9%.
Capital formation, which measures investment in infrastructure and other fixed assets, declined for a second consecutive quarter, with construction works and transport equipment the largest negative contributors.
Household consumption expenditure increased by 0.4%, while inventories recorded a net build-up of R8.8 billion during the quarter.
