New data released by Statistics South Africa reveals the country’s economic activity continued to expand in the third quarter, albeit at a slower pace than the previous three months. Gross Domestic Product (GDP) rose by 0.5% in the third quarter, a deceleration from the 0.9% growth recorded in the second quarter.
The expansion was notably broad-based, with nine out of ten measured industries reporting positive growth. Key drivers included the trade, mining, and government sectors. The mining sector saw a strong increase, largely fueled by production in platinum group metals, manganese, and coal. Agriculture also posted robust growth driven by field crops, horticulture, and animal products, while manufacturing showed modest improvement.
On the demand side, household consumption expenditure increased, supported by a low inflation and interest rate environment. Gross fixed capital formation, a measure of investment, also rose. A spokesperson from Stats SA highlighted that within investment, only spending on residential buildings declined, while transport equipment, software, non-residential machinery, and construction work all saw increases.
However, the growth was not uniform across the economy. A significant contraction was recorded in the electricity, gas, and water supply sector, marking it as the only industry to shrink from the previous quarter.
Economist Elna Moolman analyzed the figures, stating the outcome was in line with expectations. “This was quite a broad-based expansion,” Moolman said. “If we look at it from the spending side… consumer spending continued growing albeit at a slightly softer pace.”
Moolman noted a critical detail within the investment data, revealing that the expansion was “almost entirely due to the public sector’s investment growth,” with private sector investment seeing only marginal growth of 0.1%. She indicated this provides “further evidence of ongoing traction with government’s growth supportive fixed investment program.”
Despite the quarterly slowdown, the outlook remains cautiously positive. Moolman stated that in general, “we still expect economic growth to improve on a sustainable basis in the medium term.” The South African Reserve Bank has forecast growth in the local economy to average 1.3% for the year.