By The economy of South Africa has shown some positive indications of growth in the second quarter; however, it still lacks strength as some key sectors experienced a decline in the same period and unemployment increased.
The economy remains fragile since the pandemic era; however, there are some positive gains that the country has experienced during the second fiscal quarter. A number of industries enjoyed an upward trajectory with increased sales.
According to StatsSA, sales in the retail sector increased by 1,5%, representing the largest rise since the first quarter of 2022 (1,9%). All retail groups recorded positive growth, with textiles and clothing and general dealers driving much of the upward momentum.
Manufacturing production also performed well during the same period reaching growth rate of 0,9%, helped mainly by the automotive and food and beverages divisions.
The mining sector, which has been dubbed the sunset industry; had a weaker performance alongside other sectors including motor trade; restaurants, catering & fast-food; freight transport (rail and road); and road passenger transport.
According to StatsSA; mining production slipped by 0,9%, with downward pressure from iron ore, coal, diamonds and gold. The industry produced more platinum group metals, chromium ore, nickel, manganese ore and copper, but this was not enough to lift the industry into positive territory.
The motor trade sector was also lacklustre, dragged lower by a decline in sales of fuel, accessories, new vehicles, and merchandise from convenience stores. However, workshop income and sales of used vehicles were positive.
As the economy remains weak and industries performing poorly, jobs were lost in the second quarter pushing up the unemployment rate to 33.5%, the highest since 2022 in the same period when it was 33.9%. The labour market shed an estimated 92 000 jobs, while the number of unemployed increased by 158 000.
StatsSA reported that the month of August saw positive news on the inflation front. Consumer price inflation sunk to a three-year low of 4,6% in July from 5,1% in June. Lower rates were recorded for a number of product categories, most notably food & non-alcoholic beverages, transport and housing and utilities.
Producer price inflation was also lower, easing to 4,2% in July from 4,6% in June. The rate in July is the lowest since December 2023 (4,0%).
