The Real Economy Bulletin - First Quarter 2019

Main Bulletin: The Real Economy Bulletin - First Quarter 2018  

In this edition

GDP growth: The GDP declined in the first quarter of 2019, while the economy lost jobs. The downturn continues the trend of volatile growth rates that began five years ago. Previous quarterly downturns in this period, however, were driven by agriculture; in contrast, the past quarter saw a broad-based decline. The briefing note on the economic slowdown explores factors behind these trends. Read more.

Employment: Employment in the real economy fell by 160 000 jobs in the year to the first quarter of 2019. It is now at the same level it was in 2015. Manufacturing and construction accounted for the bulk of the net loss in jobs. In the rest of the economy, community and social services lost more than 200 000 jobs while other sectors gained employment. Overall, employment as a whole lost jobs for only the second time since 2010. Read more

International trade: In constant rand terms, South African exports have barely grown since 2013. In US dollars, they climbed from 2016 to mid-2018, but fell more than 10% in the six months to March 2019. Nonetheless, an even faster decline in imports – due in part to slow growth and in part to fairly low petroleum prices – meant that the balance of payments remained positive, although a deficit emerged in the first quarter of 2019. Read more.

Investment and profitability: The 2% fall in investment from the year to the first quarter 2018 to the year to the first quarter 2019 was a central factor behind the economic downturn. The sharpest decline emerged for public investment, although both state-owned enterprises and government departments reported a recovery in the first quarter of 2019 alone. Private investment, in contrast, grew slightly year on year, but contracted sharply from the fourth quarter of 2018 to the first quarter of 2019. Read more.  

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects, analysing new and updated projects quarterly. Based on media monitoring, it added 14 new projects in the past quarter. Ten of these were in manufacturing, and five were greenfield projects. Six projects previously captured in the Tracker have been updated, with two reaching completion. Read more

Briefing note: The economic slowdown: The first quarter of 2019 saw a convergence of poor economic data. The GDP fell by 0.8%; investment, by 1.1%; and exports by 2%. Employment dropped by 1.4%, or 240 000 jobs. Seasonal job losses are not uncommon in the first quarter, but from 2010 to 2018 they averaged just 0.1%, so 2019 saw a significantly larger fall. Read the briefing note online: The economic slowdown.

Briefing note: African Continental Free Trade Area (AfCFTA) - Supporting inclusive growth and transformation: The African Continental Free Trade Area (AfCFTA) requires 22 countries to ratify its adoption and submit proof/deposit the instruments of ratification with the African Union (AU) for it to come into effect. On 29 April that happened, and on 30 May 2019 the free trade agreement came into effect. Read the briefing note online: African Continental Free Trade Area (AfCFTA): Supporting inclusive growth and transformation.