Real economic activity in South Africa expanded for a fourth consecutive quarter

Source: Full Quarterly Bulletin, No 301, 27 September 2021, photo credit: The Newser

Real economic activity in South Africa expanded for a fourth consecutive quarter in the second quarter of 2021. Growth in real gross domestic product (GDP) accelerated marginally from a revised 1.0% (4.2% annualised) in the first quarter of 2021 to 1.2% (4.7% annualised) in the second quarter, despite the third wave of coronavirus disease 2019 (COVID-19) infections.

However, the seasonally adjusted level of real output in the second quarter of 2021 was still lower than the level in the first quarter of 2020 at the onset of the COVID-19 pandemic.

Growth in the real gross value added (GVA) by the primary sector accelerated further in the second quarter of 2021, even though real mining output increased at a slower pace. Mining production continued to be supported by higher international commodity prices and improved global economic activity.

The real GVA by the agricultural sector increased at a brisk pace in the second quarter of 2021 after contracting in the first quarter. Agricultural output was boosted by the increased production of field crops, with the most recent commercial maize crop estimate for the 2020/21 season being 6.6% more than the final crop for the 2019/20 season. The production of horticultural and animal products also increased in the second quarter of 2021. Real economic activity in the secondary sector contracted in the second quarter of 2021 following an increase in the previous quarter, as real GVA by both the manufacturing and construction sectors contracted. By contrast, real GVA by the sector supplying electricity, gas and water increased in the second quarter of 2021 after contracting in the previous quarter.

Production volumes declined across a broad spectrum of manufacturing subsectors in the second quarter, with the petroleum industry severely affected by the closure of some crude oil refineries. Decreases in residential and non-residential building activity as well as in civil construction activity weighed on output in the construction sector in the second quarter, with the sector still severely affected by the COVID-19 pandemic and weak investor sentiment.

The volume of electricity produced and consumed both increased in the second quarter of 2021, reflecting improved capacity at Eskom’s power plants as the sixth and final unit at Medupi Power Station achieved commercial operation status.

Real economic activity in South Africa expanded for a fourth consecutive quarter in the second quarter of 2021. Growth in real gross domestic product (GDP) accelerated marginally from a revised 1.0% (4.2% annualised) in the first quarter of 2021 to 1.2% (4.7% annualised) in the second quarter, despite the third wave of coronavirus disease 2019 (COVID-19) infections.

However, the seasonally adjusted level of real output in the second quarter of 2021 was still lower than the level in the first quarter of 2020 at the onset of the COVID-19 pandemic.

Growth in the real gross value added (GVA) by the primary sector accelerated further in the second quarter of 2021, even though real mining output increased at a slower pace. Mining production continued to be supported by higher international commodity prices and improved global economic activity.

The real GVA by the agricultural sector increased at a brisk pace in the second quarter of 2021 after contracting in the first quarter. Agricultural output was boosted by the increased production of field crops, with the most recent commercial maize crop estimate for the 2020/21 season being 6.6% more than the final crop for the 2019/20 season. The production of horticultural and animal products also increased in the second quarter of 2021. Real economic activity in the secondary sector contracted in the second quarter of 2021 following an increase in the previous quarter, as real GVA by both the manufacturing and construction sectors contracted. By contrast, real GVA by the sector supplying electricity, gas and water increased in the second quarter of 2021 after contracting in the previous quarter.

Production volumes declined across a broad spectrum of manufacturing subsectors in the second quarter, with the petroleum industry severely affected by the closure of some crude oil refineries. Decreases in residential and non-residential building activity as well as in civil construction activity weighed on output in the construction sector in the second quarter, with the sector still severely affected by the COVID-19 pandemic and weak investor sentiment.

The volume of electricity produced and consumed both increased in the second quarter of 2021, reflecting improved capacity at Eskom’s power plants as the sixth and final unit at Medupi Power Station achieved commercial operation status.

Source