JOHANNESBURG – The third quarter of 2017 saw the agricultural sector boost the economy as it grew by 2.0%, beating the 1.5% growth expectations that were forecast by economists earlier this year.
Although economic growth for the third quarter in 2017 was down from the revised 2.8% in the second quarter, Stats SA revealed that sectors such as Agriculture, mining and manufacturing were the main drivers of economic expansion in an era where the local economy has been subject to various downgrades by ratings agencies and negative forecasts from economists and financial services institutions.
The Q3 GDP report highlights that increased production of field crops and horticultural products contributed to the rise in agriculture while the mining sector, which has often been regarded as the backbone of the South African economy saw increased production reported for gold and platinum.
Commenting on the latest figures, stats SA revealed:
“After recording an increase of 38.7% in the second quarter, the agriculture industry continued to power ahead, expanding by 44.2% in the third quarter. This is the largest quarterly jump in agriculture production since the second quarter of 1996. Increased production of field crops and horticultural products were the main contributors to growth, with notable increases in the production of maize and vegetable products,” the organisation said.
Furthermore, this season’s maize crop is expected to be the largest on record.
Stats SA added that the Crop Estimates Committee has pegged commercial maize production for this season at 16.74 million tonnes, more than double the 7.78 million tonnes produced last year (2015/16), and higher than the current record of 14.66 million tonnes harvested in 1980/81.2
“Mining and manufacturing were the other major contributors to economic growth in the third quarter. Increased gold and platinum production saw the mining industry grow by 6.6%, while the 4.3% rise in manufacturing was spurred on by increased production of both petroleum and metal products,” said Stats SA.
In addition, finance and business grew by 1.2%, a scenario boosted by increased activity in financial mediation, insurance and auxiliary services. There was also positive growth in personal services at 0.9% and transport and communication at 0.6%.
Below are some of the key highlights from the third quarter 2017 GDP release:
· Unadjusted real GDP was up by 0.8% year-on-year in the third quarter of 2017.
· The South African economy grew by 1.0% in the first nine months of 2017 compared with the first nine months of 2016.
· Nominal GDP in the third quarter was estimated at R1.17 trillion.
· Manufacturing was up by R9 billion to R140 billion
· Mining was up by R7 billion to R83 billion
· Electricity was down by R6 billion to R39 billion
However, not all was peaches and roses for the economy as four major industries saw a decline in economic activity in the third quarter.
Stats SA suggested that falling employment numbers in the public sector saw general government services posting its third consecutive quarter of negative growth, contracting by 0.7%.
“Other notable industries that saw a decline were trade and electricity, water and gas. Despite a rebound in retail trade sales, falling wholesale trade sales pulled the trade industry down by 0.4%. The electricity, water and gas industry experienced a 5.5% contraction, a result of falling electricity generation and demand,” said the institution.