Main Bulletin: The Real Economy Bulletin - Second Quarter 2017
In this edition
GDP growth: South Africa’s recovery in the second quarter of 2017 continued an emerging pattern of sharp quarterly fluctuations in growth. In this case, expansion was driven principally by agriculture and mining, with only a modest improvement in manufacturing and a decline in construction. On the expenditure side, household consumption underpinned the recovery, with a continued slowdown in government spending and a further fall in investment, especially by the private sector and parastatals. Read more.
Employment: As a contrast to growth in GDP, according to the official data, employment in the economy as a whole declined by 113 000 or around -0.7% in the second quarter of 2017 compared to the first quarter. This grew around 4%, however, when compared to the same quarter of the previous year. The data show slight gains in manufacturing. Agriculture created jobs in line with the rebound in the sector. In mining, using the employer survey (which is considered more reliable for this sector), employment increased by 8 000 in the first quarter of 2017, or about 2%. This signals some stabilisation as the industry adapts to the new realities of lower metals prices. Read more.
Trade: The second quarter of 2017 saw a strong uptick in exports combined with a moderate increase in imports. The resulting improvement in the balance of trade boosted GDP growth. In the year to the second quarter of 2017, both manufacturing and mining exports increased in dollar terms but manufacturing exports fell slightly in constant rand, mainly due to the 25% appreciation in the rand in real terms from the beginning of 2016. Year-on-year in constant rand, mining exports rose by 9% while manufacturing exports fell by 1%. Agricultural exports also performed well during the quarter, but that partly reflects seasonal factors. Read more.
Investment and profitability: Total investment fell slightly by 1% in the second quarter of 2017, with a fall in both the public and private sectors. The decline of state investment is mainly due to continuing fiscal consolidation. Consistent with investment, the past year saw lower profitability in the real economy, although data are only available through the first quarter of 2017. Construction saw profits fall by three quarters compared to the first quarter of 2016. Read more.
Foreign direct investment projects: A summary of new and updated investment projects identified in the second quarter of 2017. Read more.
Briefing note: The exchange rate and the real economy: The appreciation of the rand since early 2016 has mixed impacts on the real economy. On the one hand, it reduces the cost of inputs. On the other, it makes South African products less competitive.Read the briefing note online: The exchange rate and the real economy.
Briefing note: IDC results give hope - should it be better resourced? Over the past quarter the Industrial Development Corporation (IDC) released its annual results for the 2016/7 financial year. It posted strong results, and its focus on finance for the industrial sector of the economy, black industrialists and job creation ensures that it plays an important and transformative role in the economy. Read the briefing note online: IDC results give hope - should it be better resourced?
The state of small business in South Africa 2017 - Executive summary: The state of small business in South Africa is a special edition of The Real Economy Bulletin. It reviews the state of small business in South Africa and its evolution over the past decade. It then summarises the findings from two TIPS studies into policy related to small business: proposals around how it should be defined in legislation, which in turn affects who benefits from state support; and a review of regulatory obstacles and burdens that arise from national. egislation. Read the Executive Summary. (Full edition available online on 22 September 2017)