The Real Economy Bulletin - Fourth Quarter 2015

In this edition:

Production and sales:  In the past quarter, agricultural output dropped sharply, by 4%, while manufacturing shrank by 0,6%. Mining, however, climbed by 0,4%. Overall, GDP growth slowed significantly compared to the previous quarter.  Read more.

Employment:  After falling fairly steadily from 2008, manufacturing employment levelled out in 2015. Total employment climbed by 700 000 over the year, with the bulk of net new jobs emerging in public, private and domestic services and retail. Still, the global slowdown, drought and pressure on mining and heavy industry led to widespread anticipation of job losses in the coming months, at least in agriculture, mining and metals production.  Read more.

Trends in trade: Over the last quarter, the more competitive currency protected the revenues of manufacturing and mining exporters in rand terms, despite falling volumes. The falling price of petroleum in dollar terms helped relieve the burden of slowing merchandise exports on the balance of trade. Read more.

Profitability and investment: Statistics South Africa's Quarterly Financial Statistics provides information on trends in profitability and capital expenditure in the formal sector outside of agriculture, with information currently available through the third quarter of 2015. Read more.

Behind the trends: The impact of the end of the commodity boom has coincided with a major drought in Southern Africa. These two blows lie behind the slowdown in the South African economy, which worsened in the past quarter. Read more.

Brief: The exchange rate and the real economy: The depreciation of the rand has made manufacturing more competitive. Without it, more mines would have to close down. It results in part from the end of the commodity boom, and in part from an outflow of investment over the past two years. Download: The exchange rate and the real economy

Brief: Decarbonising the economy  risk or opportunity?The commitment made by South Africa to reduce Green House Gas (GHG) emission levels at the December 2015 COP21 negotiations will affect manufacturing and mining in various ways. A key dimension is the impact of the additional cost of electricity (due to the carbon tax) and the costs associated with improvements in the use of energy, imposed by regulatory constraints. Meeting South Africa’s COP21 targets will likely require diversification away from the current dependence on mining exports, which aligns with the core objectives of the Industrial Policy Action Plan. Download: Decarbonising the economy - risk or opportunity?