The Real Economy Bulletin - Third Quarter 2018

Main Bulletin: The Real Economy Bulletin - Third Quarter 2018 

In this edition

GDP growth: South Africa’s third quarter GDP grew by an estimated 0.6% in the second quarter of 2018, reversing the contraction experienced in the first and second quarter of the year. Significant differences emerged between sectors, however, with growth in agriculture and manufacturing offset by declines in mining and construction. Read more.

Employment: Total employment reportedly increased by 190 000 or 1.3% from the third quarter of 2017 to the third quarter of 2018, despite the erratic growth in the GDP. Still, manufacturing lost over 20 000 jobs in the year, continuing a trend of stagnant employment since the 2008/9 global financial crisis. In contrast, construction reportedly gained 140 000 jobs over the year, despite the continued decline in its output. Most other new jobs emerged in business and social services. Read more.

International trade: Both exports and imports surged from the third quarter of 2017 to the third quarter of 2018 in rand terms, largely reflecting the stronger US dollar and, in the case of imports, the increase in the global oil price. As a result of these factors, the trade surplus fell sharply. Read more.

Investment and profitability: In the year to the third quarter 2018, both private investment and general government investment remained essentially flat. State-Owned Corporation (SOC) investment, however, fell by 1.1%, with a decline of 3.5% in the third quarter alone. Read more.

Foreign direct investment projects:  Eleven projects were added to the TIPS Foreign Direct Investment (FDI) Tracker, while five existing projects had major updates. The total value of announced investments this quarter was R47.7 billion, over twice as high as the total for the first half of the yearRead more.

Briefing note: Investment Conference 2018 - Evaluating the pledges: The South Africa Investment Conference 2018, held between the 26th and 27th of October, was headlined by the announcement of R290 billion in new pledged investment. Achieving that target would contribute almost a third to President Cyril Ramaphosa’s five-year US$100 billion target for new investment. Understanding what lies behind this figure is, however, more of a challengeRead the briefing note online: Evaluating the pledges.

Briefing note: Medium Term Budget Policy Statement (MTBPS) - Implications for industrial development: In the 2018/19 financial year, the South African state plans R1.67 trillion in expenditure. Of this, R200 billion (or 12%) of the budget is earmarked for supporting economic development. Of this, the lion’s share goes for infrastructure, mostly transport, with the rest supporting industrialisation and exports, agriculture and rural development, job creation and labour affairs, innovation, science and technology.Read the briefing note online: Medium Term Budget Policy Statement Implications for industrial development.

Briefing note: The Job Summit and inclusive industrialisation: The Presidential Job Summit, which took place under the auspices of NEDLAC on 4 October 2018, included several initiatives that potentially have substantial implications for inclusive industrialisation and potential for much-needed job creation in South Africa. Read the briefing note online: Job Summit and inclusive industrialisation.