Main Bulletin: The Real Economy Bulletin - First Quarter 2018

In this edition

GDP growth: South Africa’s GDP shrank by an estimated 0.5% in the first quarter of 2018, although the estimated decline may be overstated for technical reasons. The contraction partially offset the gains in growth experienced in the last three quarters of 2017. Read more.

Employment: Employment in the real economy declined by 1.1% between the first quarters of 2017 and 2018, although total employment climbed by 1.2%. Manufacturing employment expanded, but agriculture, construction, utilities saw losses in employment compared to a year earlier. Read more.

International trade: In the first quarter of 2018, South Africa experienced a trade deficit of R18 billion, a change from the trade surplus in 2017. Agriculture experienced the largest percentage decline in exports. In manufacturing, notable export growth was seen in exports of metals and metal products (2%). Read more.  

Investment and profitability: Investment started declining in 2012 with the end of the commodity boom, with an accelerating decline from 2015. In the first quarter of 2018 it was 18% lower than six years earlier. In the year to March 2018, private investment dropped 2%, public enterprises saw no change, and general government investment contracted 5%, reflecting the turn toward austerity. Read more.

Foreign direct investment projects: The number of new projects reported in the TIPS Foreign Direct Investment (FDI) Monitor dropped to four in the first quarter of 2018, down from eight reported a year earlier. Read more.  

Briefing note: Challenges around the GDP data for first quarter 2018: The recent data on the GDP appear to overstate the economic slowdown, as shown among others by a comparison with longer-term trends and employment data. The data show that the economy contracted by just over half a percent (although the release only provides annualised data, showing a 2,2% fall, which is effectively four times the actually decline). Read the briefing note online: Challenges around the GDP data for first quarter 2018.

Briefing note: Map to a Million  - what's the map to a million about? Can the manufacturing sector create a million jobs? The Manufacturing Circle certainly think so and have outlined a process to create a million direct manufacturing jobs over a period of 10 years in their recently released Map to a Million New Jobs in a Decade. Given the current number of people employed in the manufacturing sector, that would equate to creating 4.5% net new jobs in manufacturing each year for the next 10 years. For 2018 that would be just over 80 000 jobs, and all going well it would rise to almost 120 000 jobs in 2028. Read the briefing note online: Map to a Million  - what's the map to a million about?

Briefing note: Desalination - panacea or peril for South Africa? The desalination of water has been identified as a potential source for water in the country. The recent series of droughts has underscored the critical importance of an adequate water supply. In this context, many voices have hailed desalination as South Africa’s cure to water security woes. Critics, however, cite its high cost and potential environmental harm as rendering the technology unfit. Read the briefing note online: Desalination - panacea or peril for South Africa?