South Africa’s economy grew by 0,4% in the second quarter of 2024, according to the latest data from Statistics South Africa, buoyed by 3,1% growth in the electricity, gas and water supply industries – the highest recorded since the third quarter of 2008, excluding COVID-19-impacted 2020 – primarily due to the absence of load shedding and an increase in water distribution. This growth was supported by gains in the finance, manufacturing and trade sectors.

The finance, real estate and business services sectors had the most substantial impact, adding 0,3 percentage points to gross domestic product (GDP). Other contributors included manufacturing, which rebounded with a 1,1% increase after contracting in the previous quarter, driven by motor vehicle, transport equipment and food and beverage activity. Trade, catering and accommodation rose by 1,2% due to increased wholesale, retail and tourist accommodation activity.

The construction industry showed signs of recovery after a year of decline with a marginal increase due to residential and non-residential building activities although construction works slowed down.

The transport, storage and communication sectors contracted by 2,2% and reduced GDP growth by 0,2 percentage points. This decline was linked to strike action and reduced freight volumes. Agriculture, forestry and fishing also struggled due to adverse weather conditions, including lower-than-expected rainfall affecting maize and soya bean production, heavy rains impacting sugar cane crops and the effect of foot-and-mouth disease on livestock. Mining experienced its second consecutive decline, driven by reduced production of iron ore, coal, diamonds and gold.

Nevertheless, rising consumer confidence boosted household expenditure by 1,4%. Increased spending was noted across most product categories with a significant contribution from miscellaneous goods and services, particularly insurance. Government consumption also grew, aided by higher goods and services purchases and increased compensation for civil servants.

Imports of vehicles and transport equipment (excluding large aircraft), vegetables, mineral products and textiles increased by 1,7%. Conversely, exports fell due to weaker trade in vegetables, mineral products, vehicles and base metals.

Inventories increased by R9,6 billion as the supply of goods exceeded demand, prompting the trade, manufacturing and finance sectors to stockpile newly produced goods.

Gross fixed capital formation, which includes investments in infrastructure and fixed assets, declined by 1,4% for the fourth consecutive quarter. This decrease was due to reduced investments in computer software, biological assets, construction works, machinery and transport equipment.