Economic News

South Africa’s Q4 Economy: Growth in Manufacturing & Trade Amid Mixed Results

Published by
WIlliam Dube
  1. South Africa’s QFS report for Q4 2022 showed a 0.6% decrease in total turnover compared to Q3 2022, with mixed results across various industries.
  2. The manufacturing and trade sectors experienced significant annual growth in turnover, while real estate and other business services saw a decrease.
  3. The mixed results highlight the ongoing economic recovery and the need for focused investment in infrastructure, innovation, and support for key industries to drive future growth.

South Africa’s Stats SA recently published its Quarterly Financial Statistics (QFS) report, which revealed that the total turnover of QFS industries for the fourth quarter of 2022 was estimated at R3,26 trillion. This represents a 0.6% decrease compared to the third quarter of 2022, which saw a turnover of R3,28 trillion.

The report highlighted that turnover decreased in five industries between the third and fourth quarters of 2022. The largest percentage decrease was in electricity, gas, and water supply (-16.2%), followed by real estate and other business services (excluding financial intermediation and insurance) (-9.9%), mining and quarrying (-8.8%), transport, storage, and communication (-1.3%), and community, social, and personal services (excluding government and educational institutions) (-0.7%).

On the other hand, increases in turnover were recorded in trade (+4.6%), construction (+3.1%), and manufacturing (+1.2%).

The fourth quarter of 2022 also saw an estimated increase of 1.5% in total closing inventories, from R1,23 trillion in Q3 to R1,24 trillion. Construction, mining and quarrying, manufacturing, community, social, and personal services (excluding government and educational institutions), and electricity, gas, and water supply all recorded increases.

In contrast, real estate and other business services (excluding financial intermediation and insurance), transport, storage, and communication, and trade recorded decreases in total closing inventories.

The total capital expenditure on property, plant, and equipment increased by 15.5% in the fourth quarter of 2022, amounting to R111,145 million. The largest percentage increases were in electricity, gas, and water supply (+42.0%), manufacturing (+39.9%), trade (+19.5%), mining and quarrying (+16.3%), and transport, storage, and communication (+0.7%). Decreases were recorded in community, social, and personal services (excluding government and educational institutions), construction, and real estate and other business services (excluding financial intermediation and insurance).

Despite the mixed results, when compared to the fourth quarter of 2021, turnover in Q4 2022 showed a 7.4% increase. Six of the eight industries covered by the survey recorded annual increases, with the largest percentage increase in manufacturing (+16.0%). Decreases were observed in real estate and other business services (excluding financial intermediation and insurance) and mining and quarrying.

In the manufacturing sector, the 16.0% increase in turnover from Q4 2021 to Q4 2022 reflects a positive trend for businesses adapting to post-pandemic market demands. This growth may be attributed to the expansion of local production capacities and the adoption of innovative technologies.

The trade industry also experienced significant growth with a 12.7% increase in turnover. This can be attributed to the easing of pandemic-related restrictions, resulting in higher consumer spending and increased import-export activities.

Conversely, the real estate and other business services industry saw a 13.6% decrease in turnover, potentially due to the lingering effects of the pandemic on the commercial property market and the increasing adoption of remote work arrangements.

Future Outlook:

The mixed results in the Q4 2022 QFS report indicate that South Africa’s economy is still undergoing a period of recovery and adjustment. The growth in key industries such as manufacturing and trade is a positive sign, but the underperformance in other sectors suggests that there is still room for improvement.

Moving forward, South African businesses and policymakers will need to focus on promoting investment in infrastructure, supporting the growth of key industries, and fostering an environment conducive to innovation and entrepreneurship. This could include implementing policies that encourage local production and reduce dependence on imports, investing in research and development, and providing support to small and medium-sized enterprises.

The continued monitoring of these quarterly financial statistics will be crucial for understanding the ongoing trends and challenges within South Africa’s economy, ultimately informing policy decisions that will drive growth and prosperity in the coming years.

Table 1: Turnover Changes by Industry (Q3 to Q4 2022)

IndustryTurnover Change (%)
Electricity, Gas, and Water Supply-16.2
Real Estate and Other Business Services (excluding FI and insurance)-9.9
Mining and Quarrying-8.8
Transport, Storage, and Communication-1.3
Community, Social, and Personal Services (excluding government and educational institutions)-0.7
Trade+4.6
Construction+3.1
Manufacturing+1.2
Table 1 displays the percentage changes in turnover across various industries between Q3 and Q4 2022.

Table 2: Capital Expenditure Changes by Industry (Q3 to Q4 2022)

IndustryCapital Expenditure Change (%)
Electricity, Gas, and Water Supply+42.0
Manufacturing+39.9
Trade+19.5
Mining and Quarrying+16.3
Transport, Storage, and Communication+0.7
Community, Social, and Personal Services (excluding government and educational institutions)-27.3
Construction-25.3
Real Estate and Other Business Services (excluding FI and insurance)-3.8
Table 2 shows the percentage changes in capital expenditure across various industries between Q3 and Q4 2022.
WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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WIlliam Dube

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