SA – GDP increased by 0,6% in the fourth quarter of 2024

The latest gross domestic product (GDP) number for South Africa, saw an increase in GDP of 0,6% in the fourth quarter (Q4) of 2024, following a contraction of -0,1% in the third quarter of 2024. This is good news for the South African market being the highest GDP growth in some time. It is still way behind the average GDP across the African continent of over 3% but it is a movement in the right direction after the contraction seen last year in Q3.

There is a clear indication however that despite this GDP growth, manufacturing facing increasing pressure driven by overall cost of production and cost of input increases.

Manufacturing Data Disappoints

Data showed that overall, the manufacturing industry saw a decrease of -0,6%, contributing -0,1 of a percentage point to overall GDP. More worrying however is that six out of the ten manufacturing divisions reported negative growth rates.

The largest negative contributions to GDP were in were the basic iron and steel, non-ferrous metal products, metal products and machinery sectors as well as in the automotive, motor vehicles, parts and accessories manufacturing sector.

The automotive manufacturing sector is a major contributor to jobs and international exports from the country and should the downward trend in manufacturing persist, in 2025, it may have significant impact on the economic growth projections by the government, who have indicated they will achieve 1,8% growth in the year.

Agriculture – Big Growth Sector in Q4

Positively, the agriculture, forestry and fishing industry saw an increase of 17,2%, after seeing poor numbers in Q# of 2024 and this has contributed a 0,4 of a percentage point to the positive GDP growth for the quarter. This was primarily due to increased economic activities reported for field crops and animal products.

The finance, real estate and business services industry increased by 1,1%, with the catering and accommodation industry seeing an increase of 1,4%, and contributing 0,2 of a percentage point to overall GDP growth. Increased economic activities were also reported for wholesale trade, retail trade and motor trade.

Decreases in manufacturing output was also recorded in the electricity, gas and water industry (decreased by 1,4%), in the mining and quarrying industry (decreased by 0,2%). Expenditure on GDP

Household Consumption up Exports Flat

Household final consumption expenditure (HFCE) also saw a positive increase of 1,0%, contributing 0,6 of a percentage point to the total growth. Positive growth rates were reported for  sales in semi-durable, durable and non-durable goods.

The main positive contributors to the increase in HFCE were expenditures on clothing and footwear (4,4% and contributing 0,2 of a percentage point), food and non-alcoholic beverages (1,4% and contributing 0,2 of a percentage point).

Recreation and culture was up by 2,5% and contributing 0,2 of a percentage point, furnishings, household equipment and maintenance was up by 1,9% and contributing 0,1 of a percentage point. The negative contributors were expenditures on transport and restaurants and hotels.

Gross fixed capital formation decreased by 3,7%, contributing -0,5 of a percentage point and changes in inventories contributed -1,0 percentage point to the total growth.

Net exports contributed 1,3 percentage points to the total growth in expenditure on GDP