The Real Economy Bulletin - Third Quarter 2023

Main Bulletin: The Real Economy Bulletin - Third Quarter 2023

In this edition

GDP growth: In seasonally adjusted terms, Statistics South Africa reported that the GDP declined by 0.2% in the third quarter of 2023, meaning the economy shrank in year-on year-terms. The main driver of the quarterly contraction was a 10% fall in agricultural production. Manufacturing value added shrank 1.2% in the quarter, but was still larger than a year earlier. Eskom and Transnet output both dropped around a quarter off their peaks, increasingly dragging down industrialisation. Read more.

Employment: In contrast to the GDP data, the employment figures suggest a spurt in jobs growth, especially in the formal sector. They find a modest fall in manufacturing employment for the quarter. The sector remains 250 000 jobs behind pre-pandemic levels. Read more.

International trade: A strong surplus in goods trade returned in the third quarter of 2023. Exports climbed 2.9%, largely thanks to growing exports of transport equipment and agricultural products. In contrast, mining sales fell sharply as a result of lower prices and Transnet’s woes. The falling international price of petroleum contributed to the decline in imports. Read more.

Investment and profitability: Investment climbed 3.6% in the year to the third quarter 2023, driven almost exclusively by growth in private capital expenditure. As a result, the investment rate rose from 14% in the third quarter of 2022 to 15% in the third quarter of 2023. Profitability in manufacturing improved somewhat, but mining continued its downward trend. Read more.

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects quarterly, using published investment information. In the third quarter of 2023 the Tracker added 28 new projects across six industries. The total pledged investment value for the reporting period amounts to R53.6 billion from 11 projects. This quarter, 10 pre-existing projects were updated in the Tracker. Read more

Briefing Note: Downsizing at AMSA - by Neva Makgetla.On 28 November, ArcelorMittal South Africa (AMSA) announced that it was closing down its production of long steel products, around a third of its capacity, located mostly in Newcastle and Vereeniging. These products, which include coil and rods, account for a quarter of its steel output and a third of its employment. The decision does not affect AMSA’s flat steel production, which covers steel plate and structural beams and is located at Vanderbijlpark. Read the Briefing Note online: Downsizing at AMSA.

Briefing Note: Impact of the avian flu outbreak - by Gillian Chigumira and Neva Makgetla. The South African poultry industry has often suffered from bird flu, but from June this year a new variant specific to South Africa has had a devastating impact. Over six million birds have been culled in the egg industry, or between 20% and 30% of layers. Some 3.5 million broilers were also culled. Commercial farmers have reported losses so far in excess of R5.5 billion. Read the Briefing Note online: Impact of the avian flu outbreak