In this edition

GDP: The GDP barely grew from the fourth quarter of 2024 to the first quarter of 2025. It inched up at an annual rate of only 0.1% in annualised terms, with actual growth for the quarter at a barely perceivable 0.025%. Most sectors actually shrank, with a 0.3% contraction in annualised terms in non-agricultural GDP in the first quarter of 2025. Read more.

Employment: Employment grew in the year to March 2025, although it continued to lag expansion in the working-aged population. The formal sector as a whole lost jobs, however. Falling employment in domestic service and retail trade was reportedly offset by growth in manufacturing, which gained just over 70 000 new positions, as well as most other services. According to the Quarterly Labour Force Survey (QLFS), within manufacturing only the metals and clothing industries experienced substantial job losses. The survey found significant job gains in machinery and auto despite their falling sales. Read more.

Infrastructure: In the first quarter of 2025, Eskom’s electricity supply fell back to levels last seen a year earlier, but the tonnage carried on rail and road and through the ports recovered slightly. Both rail and electricity are well below their levels a decade ago, while road freight and private electricity sold to the grid have grown. Eskom’s tariffs increased by around 10% above inflation in April 2025, adding to the cost burden especially on electricity-intensive producers. Read more.

International trade: South Africa ran a trade surplus in the first quarter of 2025, despite the normal seasonal downturn in mining exports. In manufacturing, auto exports grew by more than 10% in constant rand terms. Metals exports fell by a similar amount, mostly because ferrochrome production shrank thanks to lower world prices and escalating grid electricity costs. Read more.

Investment and profitability: Private investment fell at an annual rate of 5% in the first quarter of 2025, the worst decline since the pandemic downturn in the second quarter of 2020. As a result, although investment by state-owned companies increased, total gross fixed capital formation shrank by 2%. Investment is now 14% below the first quarter of 2019. Read more.

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects quarterly, using published investment information. It added 15 projects in the first quarter of 2025. The announced investment value for eight projects that reported values in the quarter came to R17.4 billion. The tracker recorded investments in manufacturing, services, mining, electricity and agriculture for the quarter. It updated 13 existing projects. Read more.

Briefing Note 1: Provincial economic developments - by Lucas Mthembu and Neva Makgetla. TIPS’s annual Provincial Review analyses key economic and policy developments in South African provinces. It highlights shifts in the national economic geography as shaped by the GDP, population, employment, business activity, and infrastructure at provincial level. The review includes a separate, detailed overview for each province. The 2024 review analyses provincial trends up to 2023, using the most recent data available as of early 2025. This briefing note summarises the key findings of The Real Economic Bulletin Provincial Review 2024. Read the Briefing Note online: Provincial economic developments.

Briefing Note 2: Greening industral policy in South Africa: Insights from China, the United States and the European Union - by Michael Hector.  The European Union Green Deal Industrial Plan, the US Inflation Reduction Act, and China’s 14th Five-Year Plan are substantial policies with the potential to significantly influence the transition to greener economies. These policies, while green-focused, are integral to broader strategies aimed at economic and social recovery from the 2020 pandemic and enhancing global competitiveness. This brief draws on a recent TIPS working paper publication: Greening Industrial Policy in South Africa: Insights from China, the United States and the European Union.  Read the Briefing Note online.